Why budget? Why not. If you ever look at your bank balance at the end of month and realize you have more debit than credits, well, you need a budget. In uncertain times and uncertain careers stretching your dollar is one of the most basic, and easiest things to do. Yet people in their 20’s hardly think to budget. Budgeting is reserved for mothers and families, individuals saving for retirement, business owners and starters. We forget that we also wear those titles and should make budgeting a top priority. On top of that, student loans, new careers, and bills we completely forgot about, should all be driving reasons why we should sit down and set up a budget.
You want to make your budget as easy as possible. You don’t want making your budget to be annoying, or depressing.
The first part of your budget will be your Income. This includes your take home pay, gifts from parents, interest, and any other form of income you want to include. Sometimes even just looking at what you really make can be an eye opener.
Next you want to take a look at your Expenses. This can include things like your groceries, rent or mortgage, credit card payments, going out, and everything else you spend money. Do not leave out anything. This will take the longest. That’s why it’s a good idea to have all your statements in front of you or pulled up on the computer. When you are figuring out how much money you will spend on each expense, be realistic. Sure you want to save money, but cutting yourself too short can lead to frustration and giving up on the budget all together. Set attainable goals.
The next section should include a Savings section. This should include all the money you are putting away at the end of the month. The rule of the thumb is you want to have at least 3 months worth of expenses readily available. So try putting 10% of your income into savings first.
After you figure out how much you are making, how much you are spending, and how much you are putting into savings, you want to start Cutting Out Expenses that you don’t really need. Maybe you don’t need all 1,000 channels on your cable bill, or cut down eating out every night and try one new restaurant once a week. You might find you can skip the gym membership and go running in the park. Looking at what you can cut down, you can see that you’ll save your self hundreds every month.
Some quick tips:
* Categorize your expenses.
* There are plenty of free budgeting softwares like Quicken Online, or you can use good ol Excel.
* Check your budget every now and then to make sure you stay on track.
By sticking to a budget you can help get your money in control. If you have trouble sticking to your budget, don’t panic, almost everyone has trouble sticking to their personal budgets. The great news is that you will be in control of your money and you want have to fight spending urges because you know how much money you have left for each specific item. Hopefully after you have set up a budget, and stick with it, your bank account will no longer hold any uh oh surprises.
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