Creating A Budget Plan - Tips For Creating A Budget Plan
Are you struggline to make your hard earnedmoney stretch from paycheck to paycheck
? It doesn't matterifyou are a one or two income family because it seems like there is just never enough money - no matter how much you earn. Even if you get pay increases every single year,does it still seem like you are always running out of money? One of the best ways to get your money to work better for you is by
creating a budget plan and sticking to it.
I know. You are groaning to yourself and you are ready to click off this article. But don't go yet. Creating a budget plan is not that hard.
Do you even know how to go about creating a budget plan? If you don't, not toworry. Breakthe process down into easy to do steps.
One of the first things you need to know is how much money you are spending so, your financial information. This includes your bank statements, credit care statements, any receipts you might have, your check register, etc. All of these documents will help you figure out where your money has been going.
The next thing you need to know is how much money you and your partner if applicable, make each month. The salaries from full time jobs are easier to figure than part time jobs with variable hours. If your hours vary every month, figure your income on the low side to be safe. You should also include any child support payments that you may get or any interest you receive.
Categorizing your expenses is the next step in the process.. When creating a budget plan, you have to categorize where you spend your money but don't include any dollar amounts just yet. Your categories should include mortgage / rent, groceries, utilities, insurance, car payment, entertainment, etc. You also need to put in a savings category.
Once you know what your categories are, figure out which of your expenses are fixed and which ones are going to change every month. It is a lot easier to plan for the fixed expenses than the variable ones. It is time to start putting dollar amount in the columns. You may have to "guesstimate" how much you spend in some areas at first and come back at a later date to make adjustments.
Now that you know what you earn and what you spend, you have to see how your income compares with your expenses. Assuming that your income is greater than your expenses, then you are probably in decent shape. But, if you are breaking even or worse, you are spending more than you make, it is time to consider some serious cuts in your expenses and / or possibly getting another job that pays more or a second job. The bottom line is that you cannot continue to spend more than you make so something has to be done.
The final step in creating a budget plan is the most difficult because now you have to stick to it! For example, if you only put in $100 to buy new cloths and you find an outfit that costs more than $100, you are going to have to save some money for it and buy it at a later date. You cannot spend the extra money and purchase the outfit and stay on budget!
A new budget needs to be reviewed every month to see how you are doing. Chances are good that you are going to have to make some changes. You may have to add money to one category and take money away from another category. If by chance you find extra money, add it to your savings account.
Try it for a month and see what happens. It is really not that hard to do and the act of actually writing down where your money is going may shock you into realizing that you really do need a budget.
Creating A Budget Plan - Tips For Creating A Budget Plan
By: Debbie Lynn
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