Budgeting For Beginners

Budgeting BasicsIt has been a while since I dove into a topic that is relatively straight forward but so many people have trouble with, that’s it Budgeting.  I have trouble with it as well, we are soon to be receiving our income taxes and we have some credit card debt.  What should we do with that money?  In comes budgeting, sit down and prepare a list of all the expenses that you are paying on a monthly basis.  Wait what, what are expenses…hold a minute..expenses are just that what are you paying out each month as an expense.  Bills!  Student loans, Credit cards, the list goes on and on, well if you are like us the list is quite lengthy.

Next after listing down all the bills that you pay on a monthly basis, write down their due dates.  I would really love it we could just pay them all up front each month and have all month off and not have to worry about paying the bills, but if you are like many now a days you live pay check to pay check.  Don’t worry you are not alone!  Now that we have the bills listed and their due dates we need to see what money we have to pay the bills.

I have access to all of our checking accounts online, if you don’t look into an online account like Check ‘n Go, and I get my pay check directly deposited, so we may need to dig a little to see the exact amount of money coming into the household on a monthly basis.  Ok we see that we get paid biweekly and each check is 1000.  So we have 2000 a month coming into our account and 2 months a year we have 3000!  Great!

Hopefully now you will have determined that the money coming in is greater than the money going out.  If it is not, don’t worry there are things we can look at to help cut down on the money going out.  Great you have done your first budget.  See it does not have to be a long and drawn out process.  List your bills, include in your bills things such as food and gas and list your sources of income.

Now that we are tracking this, we can look down the list of bills and see if there are any areas that we can reduce what you spend.  Sure you may have a luxury item such as Pandora that you are subscribing to monthly.  Sorry that is one of my monthly expenses, I listen to it all day everyday at work.  So that 3.99 a month is well worth it to me.  Ok back, maybe cutting that expense completely will give us some additional money that we can put into savings.  Go line by line and see where you can cut down on your expenses.  Soon enough you will be well on your way to having that financial security that you are looking for!

 

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Comments

  1. This is exactly right – you need to make sure your cash flow is positive, or things will end badly! The best way is to keep track of all bills and spending to ensure you tip the scale in your favor.

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