Is it Hard to Make a Budget?
Most people seem to be afraid to budget. Even just the word 'budgeting' makes them nervous and cringe. To them it means living a lesser life while doing more work. They think budgeting is hard and will take away from them the things they love in life. They think they could never budget because it is just too difficult.
Is it really hard to make a budget? It can be, but if it's done right with the right tool, it can be a breeze, and it can be just as easy to follow it. Before you start budgeting, you need to know how much money you normally make and normally spend on a regular basis.
For most people, it's very simple to calculate income because they only have one salary, but also include any other income including interest on a savings account or CDs, dividends, capital gains, royalties, tips, and all other income.
Now add up all your spending for the month. Write down every single thing you buy, no matter how big or small. The obvious expenses are rent or mortgage, utilities, food, debt payments, etc., but you must also include the variable and small expenses such as gas, daily coffee, sodas, etc.
Total up these two amounts and subtract the expenses from the income. If this number is zero or very low, you need to budget in order to save more and to get out of any debt you may have. If you get a negative number, that is very bad because it means you are going into debt.
You are spending more money then you have and must be using credit to pay for it. This must be controlled. If you have a large positive number, that is great, but if you haven't bee budgeting at all, you can probably make that number a lot larger.
You can use any tool or method you want for budgeting such as software, excel spreadsheets, or a simple notebook and calculator. Just plan out how much you want to spend on what each month working around how much you want to save. To make it easier, be as specific as possible. For example, put a certain amount for entertainment, clothes, gift, etc.
When you start budgeting, you will find out that it is not as hard as you thought. The longer you do it, the easier it is. Keep at it and you'll make a habit and you'll find ways to be frugal with the things you don't care for so that you can buy the things you really want.
Is it really hard to make a budget? It can be, but if it's done right with the right tool, it can be a breeze, and it can be just as easy to follow it. Before you start budgeting, you need to know how much money you normally make and normally spend on a regular basis.
For most people, it's very simple to calculate income because they only have one salary, but also include any other income including interest on a savings account or CDs, dividends, capital gains, royalties, tips, and all other income.
Now add up all your spending for the month. Write down every single thing you buy, no matter how big or small. The obvious expenses are rent or mortgage, utilities, food, debt payments, etc., but you must also include the variable and small expenses such as gas, daily coffee, sodas, etc.
Total up these two amounts and subtract the expenses from the income. If this number is zero or very low, you need to budget in order to save more and to get out of any debt you may have. If you get a negative number, that is very bad because it means you are going into debt.
You are spending more money then you have and must be using credit to pay for it. This must be controlled. If you have a large positive number, that is great, but if you haven't bee budgeting at all, you can probably make that number a lot larger.
You can use any tool or method you want for budgeting such as software, excel spreadsheets, or a simple notebook and calculator. Just plan out how much you want to spend on what each month working around how much you want to save. To make it easier, be as specific as possible. For example, put a certain amount for entertainment, clothes, gift, etc.
When you start budgeting, you will find out that it is not as hard as you thought. The longer you do it, the easier it is. Keep at it and you'll make a habit and you'll find ways to be frugal with the things you don't care for so that you can buy the things you really want.
About the Author:
Setting up a household budget is not difficult at all. Once you get the hand of it, it's easy. Use budget software and it's much simpler!
posted by Credit Counseling at
12:13 PM
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