Have you thought about budgeting money lately? I can hear the groans already. Nobody wants to think about creating a budget. It means tediously figuring out your actual income and expenses, and worse, discovering how much money you might be wasting. However, this is exactly what will save you money and allow you to start doing the things that a lack of money has prevented.
3 Steps to a Sensible Plan
It’s really not as involved as you might think. You can cover the entire budget plan in three steps:
- Track your current expenses.
- Figure out where your money should be going.
- Monitor your spending and make sure your money goes to those places and nowhere else.
You should be as meticulous as possible, but there’s no need to get obsessive over the plan. Start by writing down what you pay every month for your bills, groceries, gas, entertainment, etc. Include even small purchases like lunches at work and morning lattes. When you find your spending habits staring back at you, you might discover that you should renegotiate your cell phone bill or insurance, or that you’d save $50 a month if you brewed your own coffee at home and stopped buying magazines that you don’t have time to read anyway. Maybe you’d save if you only went out for dinner once a week instead of three times. Check out movies from the library or use a subscription service like Netflix instead of going to the movie theatre so often. Cut expenses where you can, and then stick to it!
Helpful Hints for Budgeting Money
There are software programs available when you’re looking at budgeting money. Quicken and Microsoft Money can be good places to start. They allow you to plug in your income and expenses, and then they create the budget plan for you. You can keep your expenses under blanket categories or get as detailed as you’d like to find even more little places where you could save.
When entering your income, be careful not to include any projected or possible income like raises, bonuses, investment returns, or count on your cousin repaying that money you lent him last year. Only depend on your current true salary. This way, if you do receive the extra money, it will actually be extra money that you can then add to your savings or use as a treat for being so good with your money until then. (Just don’t get lured back into bad spending habits. Saving is your best option.)
Be aware of how you handle actual cash in your pocket, too. It’s easier to lose track of what you’ve spent until you realize your money is gone. If cash is a temptation for you, consider carrying only enough to cover emergencies. I find myself watching my spending more if I’m using my debit card for purchases. The money is coming from the same place that cash would, but I’ll be faced with real numbers as I’m spending and when I go to balance my checkbook.
Budgeting money doesn’t have to be a chore, and it can really be enlightening. It forces you to be honest with yourself, and that’s the only way you can really see your spending habits and learn how to create better ones.
