If you want to be financially secure or successful it’s very vital to know how to budget. A budget is basically like a schedule but instead of scheduling time, you schedule your money. Your goal is to have enough money for all your basic needs, like food, clothing, and shelter and enough money for some recreational activities that make life more enjoyable. If you’re in debt either bad debt (reckless spending) or good debt (car payments or mortgage payments) smart budgeting can help you to get out of debt fast or can enable you to have enough money to pay necessary payments like mortgage payments on a regular basis.
Examine your lifestyle. Keeping your life simple will help you stick to your budget and will keep your money from flying out of your pockets fast. It does help if you don’t have big mortgage payments. It’s tempting to buy a big house that’s out of your price range, but it can be more of a headache in the long run giving you stress in trying to make big payments each month. The same goes for car payments. It’s better to buy a used reliable car and have it paid off already than having payments on a brand new car. You’ll have more money for your budget that way. Don’t spend money that you don’t have like when you use your credit cards.
For a simple budget, let’s just say we only have 2000 dollars a month coming in. How should that be spent?
- Mortgage: 500 dollars
- Power and water: 100 dollars
- Phone, cable, internet: 150 dollars
- Insurance: 80 dollars
- Fuel: 100 dollars
- Food and other household items like cleaning supplies, toiletries, and pet food: 500 dollars
- Paying of debt or savings account: 500 dollars
- Miscellaneous (haircut, eating out, coffee): 70 dollars
If you rent, the following budget can help you if you have 2000 dollars coming in.
- Rent: 1000 dollars
- Power and water: 50 dollars
- Phone, cable, internet: 100 dollars
- Insurance: 50 dollars
- Fuel: 80 dollars
- Food and other household items: 400 dollars
- Paying off debt or savings: 250 dollars
- Miscellaneous: 70 dollars
Try this budget for a month and make adjustments where necessary. You might be spending more or less on food per month so budget accordingly. You can try to cut things to bare necessities if you’re deep in debt until you pay off your debts. If you’re budget is really tight, try looking at options that will increase the amount of money you’re making. Ask for a raise or get another part-time job in the evenings or weekends. You can make your hobby into a profitable business that you can do after you get home from your day job. That will help with giving you extra cash to add to your budget. At the end of the month, if you do have some extra cash after following your budget, that extra cash should go into your savings for random things that happen like emergencies, vacations, or you can keep that money in your savings to use when you retire. Get professional accounting help from Accountancy Services to help you plan your spending so that your money is well spent and well saved.
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