How to Create A Budget That Works For You
Everyone has different factors that influence their lives and their money. Therefore what budget may work for one person may not work for another. However, it is possible to come up with a budget that caters to your own individual needs and wants. Read on for more tips.
First, assess your income
This is a necessity because you need to know how much money you are working with monthly. Depending on your payment scale you can easily calculate this or you may have to take the averages of your payments for the month. Once you have this information, you can begin crafting a budget that works.
Make a list of your bills, needs, wants
Make three lists. Your list of bills or mandatory payments should be the first list because those bills will have to come out every month, no matter what. This should also include a portion to pay the debts that you owe as well, in order to help you get them paid off. The second list should be your needs, such as grocery items, personal hygiene items, etc. This may fluctuate from month to month depending on what you buy, what is left over etc. Your wants list should consist of things like entertainment, going out to eat, a new bag, or shirt or things that you don’t necessarily need to do. However, things like attending your sister’s wedding brunch would be considered a necessity for the month, unless you could forego that without any familial repercussions. It is important to assess needs and wants very thoroughly in this category.
Don’t forget to include savings
Many people forget to include a savings account. A small portion of the money that is made should be set aside for savings in case of an emergency or to go towards bigger ticket items. I would file this under my bills, to ensure that it gets some deposits!
Where can you save?
Looking over your lists, determine where you can save? Can you shrink your bills? Do you need cable? Can you use sling or Hulu? Does your phone plan have a discount that you can take advantage of? Do you really have to have Starbucks coffee every day? Can you brew your own coffee at home? Where can you save money?
Set some goals
This is also another great guideline for a simple budget. You can also set goals for things such as a vacation, new car, or simply extra entertainment/fun for an upcoming month. When setting these goals, it is important to decide where you can pull the cash from. Can you forego wants this month or take a few dollars from each category to put into the fund? (If you pull from the mandatory category, make sure everything is covered before doing so). Only you will know when and where you can afford to be flexible. Do not make it habit to borrow from categories each month, however. Try to stay within your percentages if possible.
Use apps and tools to help you budget
Money saving apps and tools can make a huge difference whether you are a pen and paper person or an electronic person. If you enjoy pen and paper, use a budgeting sheet which you can buy off of Amazon and if you desire, then follow up with an electronic tracker, like Mint. If you are an electronics person, then look into which apps have the highest rating for all-around money management and check out the top money saving and budgeting apps. Additionally, you can simply choose to auto deposit into various funds using app tools for management.
Creating a budget doesn’t have to be scary or hard. While you may realize you aren’t where you thought you were, financially, with the implementation of a budget you can finally begin taking control of your finances and your life!