How To Create A Budget

If you find that you’re living from paycheck to paycheck, then you might need to sit down and figure out a better way to be saving your money. Of course, the best way to do this is to have money left over from each paycheck to save. Think there’s no way you can do that? Then you need to sit down and create a budget. In this blog post, we’ll briefly explain how to create a budget so you can keep better track of your money and be saving!

Analyze your spending

Make an excel document and clearly list out what you are spending every month. You may need to sit down with your bills and receipts and your spouse (if applicable). Just open a document and label it expenses then make a column of items and next to it type in the price you pay monthly. You can organize it like this.
how to make a budget

Once you have it all listed out, add up the total to see what you are spending every month.

Determine Your Income

Next, make another area in your spreadsheet of how much you make a month. Add your wages/salary at work, and any other jobs you have. If you have any investments or other income, make sure it’s noted on there.

Find what you can eliminate/decrease from expenses OR increase income

Now you need to look at the discrepancy between what you make and what you spend. Do you have any money at all left over from your income that doesn’t go into spending? If you have little, none, or not as much as you would like, then you will need re-evaluate your expenses. Find something that you can cut back on. Maybe you can’t get Starbucks every day- instead you might have to limit yourself to once a week, or a less-expensive kind of coffee. Maybe you can find a cheaper phone plan that the one you’re currently on. If there’s literally nothing that you can cut back on, then you will need to look at finding a way to increase your income. This could come from looking for side jobs, working extra hours at work, or asking your spouse to help find extra work.

Final Step

Once you’ve found where your money is coming from and going, and made appropriate adjustments, you need to document it and refer to it often. Make a new excel spreadsheet that lists out how much money you will allow yourself to spend on each category. Perhaps you will have a “Eating Out” item that is half of what it used to be in order to allow you to save that money. Make sure you refer to this often to make sure that you are not spending more than you should be.

Try out these ideas and see if it doesn’t help you be more organized with your money, save more, and spend money more efficiently. With more pressure to keep your costs down, you’ll start finding more creative ways to cut costs. Then when you get a bonus at work or a promotion/raise, you’ll be able to save even money instead of just “breaking even”. Have some other questions or thoughts about budgetting? Let us know! We’re happy to help!