Many people don’t know how to create a budget because they feel like it is a difficult task or it is too late. But in reality, creating a budget planner is very simple, easy, and enjoyable! It doesn’t matter what situation you are in, creating a budget is very important for everyone. If you have never created a budget, don’t worry, we are here to give you some budgeting for dummies tips and tricks!
Determine Your Income
One of the first steps in creating a budget is determining how much money you have coming in. Calculate how much you make in a month, and write that down. The easiest way to do this is by taking a look at one of your paycheck stubs from your latest payday and one from the same time the previous year. If your income fluctuates from month to month then you should take the lowest possible amount earned on any given month. Guessing a low amount will give you room to save money on the months you earn more than that low amount. It is always good to assume the lowest price, so you will never come up short!
Financial statements include bank statements, bills, and any document that has an indication of money coming in or out. This will help you physically see where a lot of your money is going. It is really important to determine where you are spending the bulk of your money. Is it food? Is that item a need or a want? Locate where you can cut out expenses, so you can start saving today.
The next step in our budgeting for dummies tutorial is making a list of all your expenses. Track bills that are coming up in the future, and find past bills. It is very important to know exactly how much you are going to spend on expenses. Once you know how much you spend, take a look at your weekly and monthly expenses and see if there is any way you can cut your expenses.
Now that you have everything that you spend on a regular basis written out in front of you it is time to make some cuts. Take a look at all your expenses and determine which things you can cut out. Here are some examples:
- Going out to eat.
- Buying name brand food and clothing (do you really need that little logo on your shirt? You can probably get one that looks similar and fits the same for much cheaper at a local thrift store.
- Going out for expensive activities on date night (try some activities that don’t cost money like swimming at a local pool, an outdoor picnic, a biking trip, or a hike.
- Taking the kids to expensive activities (Try some fun activities that don’t cost money like going to the park, camping in the backyard, etc.)
- Borrow (Need something like a carpet cleaner? Before you spend a fortune buying something you aren’t going to use very often, try borrowing or even renting from friends and family first.)
Thank you for reading, we hope you have enjoyed these budgeting for dummies tips and tricks.