Creating A Budget
Do you find it difficult to make a budget and then live by it? Many people, if not most, are so afraid of developing a budget that they never even start one. That is perhaps a major reason why in the United States there is $1,000 in personal debt for every man, woman, and child. Making a budget is the first step to help you keep out of debt
Making a budget is not hard. You can use a spreadsheet package or a legal pad. If you don’t have a spreadsheet on your computer there are free spreadsheets available for download at openoffice.org or docs.google.com.
If you are going to be working on this with your spouse, be sure to keep it lighthearted and enjoyable. Making a budget should not lead to marital problems. In fact, a budget should relieve your financial stress.
A budget is basically two columns: Income and expenses. The income column is the easiest. You simply put in the total monthly income that you make.
The expenses column is a little more difficult. You will need the total amounts that you spend on all expenses, such as mortgage or rent, utilities, food, eating out, movie rentals, etc.
Once you have the numbers you need to include in your expenses, record them on your spreadsheet or pad of paper. Add them up and see which column is greater.
If your income column is greater, you are done. Just live within the budget and, as long as no big unexpected bill comes along, you will be okay. If the expenses column is bigger then you need to go through the budget and reduce some amounts wherever you can.
Again, keep it positive and enjoyable. Writing up a budget and then living by it is a part of life, and if you are able to stay within your budget you will be much better able to stay out of debt.
Tags: Budgeting