Making a budget work isn’t always the easiest thing in the world to do. It is something that takes had work, team work (if married) and patience in order to accomplish Making a budget in the first place was hard enough but making it work…even harder. I am going to share some helpful tips that I found to be very useful information with maintaining a budget.
Many people look at the word budget as a dirty word, or something to be afraid of. The truth is, budgeting can actually be a way for you to free your money in a sense. Many people that follow a budget will tell you that it can actually allow you do to more things than you regularly would without one. This is simply because it takes the guess work out of where your money is going and allows you to be sure about what you can spend instead of only telling you what you can not spend your money on.
Make a budget
Before you can make a budget work, you need to have one first. This can be a very challenging feat for most people, but no matter how hard it may seem, remember, “you can do it”. A budget is just another word for saying “spending your money on paper”. This means that you are telling your money where to go instead of wondering where it went. Budgeting is a very effective way of managing your money, and once you have and are use to spending on a budget, you will learn to appreciate its capabilities and benefits.
Where does your money go
One of the biggest mistakes people make when they make their budget is that they do not spend all of their money on the budget. I’m not telling you that people shouldn’t save, but that every penny that comes in should be accounted for in your budget. You should brainstorm to collect all of the different items you spend money on. Be sure not to leave anything out of this. As you think of the different things such as giving, savings, electric, water, mortgage/rent, cell phone, internet, gas, auto repairs, insurance, groceries, eating out, hobbies, etc.
After you have figured out all the different avenues you choose to spend your money on (and you will probably think of more as the budget is written or as you play out your budget), you need to categorize them from needs and wants. Needs are things you physically can not live without such as Food, water and shelter. Next are your wants such as eating out and groceries. Once you have these in an organized list, you can move on to the next step. Remember to include entertainment and mad money (mad money is money you can spend on anything you want. You can call it whatever you want, it’s simply the money you set aside for yourself to have fun and enjoy life) as this is very important to making your budget work.
Find out how much money is coming in each month
The second thing I do when I create a budget is to see how much money is coming in each month. If you are on a fixed income or salary, this should be a lot easier to do. If your paychecks are different every time, I would simply look at how much I made with the last 5-10 checks and then whatever amount I consistently get, go by that. For example, if my last 5 checks were “$345, $352, $343, $301” and “$327”, then I would budget for $301. I would then disperse the “extra” cash into separate categories based on a percentage format.
Create your budget
Now that you have a list of expenses, along with how much money you bring in each month, you can start to fill in the blanks. There are many different ways you can do this. I would recommend researching all of the different types to find out which one best suits your lifestyle. Here is a great page to get a lot more information on the subject on ChristianPF.com.
One month at a time
After you go through each month, make adjustments as needed, but try to stick with what you have as closely as you can. You will find that you probably forgot an expense or two when you created your budget. This is okay. All you have to do is re-adjust your budget and you are set. Many people give up after they make a mistake with budgeting because they think they just can’t do it. It takes a few months to get fully set into your budget because you create it based on what you have spent in the past. Once you follow a budget, people generally find they they don’t need as much money in different categories that they had originally planned, leaving room for other items on the budget such as giving or savings, even your mad money or blow money (money for anything you want.)
I hope this was a little help to those who are interested in making a budget, I didn’t get very complex into the subject as one could truly write a book on this subject, or even a separate book for each topic within the subject alone. The page on ChristianPF.com that I reference has a lot of different articles pertaining to the subject that I am sure will help you along the way.
Thanks for reading, and please leave any suggestions pertaining to this subject below