A Basic Budget
Do you have a budget setup? Do you even know what a budget is and why you should have one? The basic principle of a budget is to track your earnings and spending habits over a certain period of time. Setting up a simple budget can be a simple process and you can hear a lot about yourself in a short period of time.
The first step in the budgeting process is to decide how you want to handle your budget. There are several options to consider: free budgeting software available for download on the Internet, create your own spreadsheet, or the old fashioned paper budget. Use the method that makes you feel comfortable and one that you will continue to use.
Once you have your budgeting method you will need to figure out your monthly income. Write down all the sources of income which you currently have and the amounts from each of those sources. This can include full time job, part time job, rental income,Â etc. Add all these sources to get your monthly income.
The next step is to write down all of your mandatory bills that you have each month. This includes utilities, house payment or rent payment, car payment, credit card payments, personal loans, etc. Each of these needs to be listed and then figure out the total. Now you have your monthly income and your outgoing cash. Subtract the outgoing cash from your monthly income to find out how much money you have left to spend each month on other necessities such as groceries, clothing, entertainment, savings, giving, automobile maintenance, etc. You will need to calculate each of the categories according to your lifestyle. Always try to put money in each category because most of us have all of these expenses.
Here is a simple sample budget to use as a guideline:
Husband Income : $2000/month
Wife Income : $2000/month
Total : $4,000
Electric : $120 / Cable : $80 / Phone : $50 / Water : $50 / House Payment : $1000 / Car Payments : $700 /
Credit Card : $100 / Car Insurance : $200 / Life Insurance : $50
Total : $2,350
Groceries : $400
Clothing : $300
Entertainment : $400
Savings : $200
Giving : $300
Auto Maintenance : $50
Obviously very few people will have a budget like this, I am only showing you a basic layout for a budget. Also most budgets won’t be this relaxed there will be a lot less money left over each month to give and put into savings. This is where the stress comes into budget planning. You may need to make some adjustments to your lifestyle in order to increase and decrease certain categories. There are many articles on this site that will help you fine tune your budget and find extra money in order to relieve budget stress. Later I will create a more detailed budget to use for an example.