by Bo, April 07, 2014
The word BUDGET brings up some nervous tendencies in many people. We are not born ingrained with the knowledge of how to set up a budget and frankly, many people disregard a budget all together because they just don’t know what to do. We have addressed setting up a budget here before on the blog and it is a topic that we get a lot of questions and interest in. Today we are going to focus on how to budget your money so that it is an easy function that you can continue to work on in your business finances and personal finances.
There is no right or wrong way to budget your money. But you have to start somewhere. So in order to know how to budget your money, you need to know exactly what is coming in and what is going out. You can use a grid notepad or an accounting columned notepad for easy tracking of your income and expenses. Set up a column for income and a column for expenses. List everything there.
Is there a large difference from your income to your outgoing? Do you have money left over or are you in the red each month? If you are in the red, you need to find a way to reduce your expenses immediately or find a secondary income stream to add to your income line.
Assign your budget amounts to each expenditure. Many expenses are the same amount each month. For those that are not, that 3-6 months worth of expenditures and average them for your set budget amount.
There are a few tips that you can do to make sure you remain on budget each month. First, you can set up a spread sheet or use your columnar note pads and diligently track your expenses. For some people that will work. For others that need more control, set up an envelope for every expense you have and place a check or cash into the envelopes. You can only spend what is in the envelope for that month. This will not allow you to spend more than what you have. Sometimes seeing money in the bank, subconsciously you think it is available to spend.
Both of these options are a strong way to control and track your spending habits and stick to your budget. Take time to work on your budget to find the right solution for you.
What are some tips that you have used to budget your money?