How To Make A Budget?

Answer 1

In today’s economy, making a budget is more important than ever. People aren’t getting the salary raises they used to get. As the cost of living rises, keeping up with your finances is extremely essential. There are many tips out there to help you make a budget.

The first thing you should do is make a spreadsheet based on your frequency of pay. If you’re paid monthly, make a monthly budget. If you’re paid every two weeks, base your budget on that. It’s important to list all the income you make so that you know what you will have. If you are paid every two weeks, you know you will get at least two checks every month. You can combine them to make a monthly amount, but I recommend listing them separately.

The next step is to list your fixed expenses. This includes rent, loan payments, and other fixed bills. These are bills whose amount and pay date you always know. List the amount due on the day its due under each pay period. After you do that, list all your variable expenses. These include credit cards and grocery expenses. Set a comfortable amount you feel as a target. For example, $100 for food and groceries is every two weeks should be reasonable. Try your best to come in under budget. If you wind up paying $89 toward groceries, put that extra $11 in to savings.

Once you have your fixed and variable expenses, make a line for entertainment, including nights out or movie purchases. Try to keep this a low amount and consider your income when determining your entertainment expense. Try your best to come in under budget, and put any left over money in to savings.

Lastly, add a line to your budget for a fixed savings amount. You can either list it as an expense or deduct it from income. Many companies allow you do divide direct deposit in to multiple accounts. If you have this option, it may be easier to put $50 or $100 from every check in to savings. Savings is vital not only for your future but also for any potential emergencies such as car repairs.

Whatever you decide to do with your budget, make sure it’s something you feel comfortable following. Take some time and modify it until you find the right spending ratios. Once you have that, do your best to stick with it.