Are you thinking about getting your finances under control and tightening up your belt to achieve some goals? Then first thing’s first, you need a budget! Goals are great, but you need to know where you are starting to know where you’re going to end up and how to get there.
There are two ways to on How to Budget Your Money. First, would be listing out all of the possible spending categories (payables) and plugging in your “take home” income (receivables). The other is the reverse. List out all of your monthly expenditures and then divide your monthly income up accordingly. Personally, I think there is no “right” or “wrong” way but only a matter of preference and what actually works for you.
How to Budget Your Money
If you are tackling a budget the first way I listed (by a set list of payables), there are many categories to consider. A preset format may be the easiest place to start, but it can be easy to overlook categories that may apply to you that are not included.
Here are some categories to get you started, you can do subcategories under each to get specific.
For your house/apartment:
Household furnishings and equipment
Ridesharing/share of cost
Cost of groceries
Take out/dining out/unplanned grocery trips
Food prep costs
Credit cards/debt reduction
If you are starting in “reverse” and listing you expenditures first, I would suggest collecting the bills in hand on paper (even if you pay online). A tangible bill in hand makes it easier to get the bigger picture that you need for a budget. Don’t forget to include the non-bills like food, gas, and recreational activities. Those items may take looking at your past bank statements to come up with a paper you can keep “in hand”. Next, prioritize them by order of importance. Some people prefer to use different “hands on” systems. Something along the lines of a budget binder or using the envelope system may work for best you.
What may work best for one person, will not work for another. Try different systems and find out what will help you get your budget under control and stick to it! Holding yourself accountable will help in more areas of your life than just your finances. It seems like a daunting task, but once you get the system in place you may find that it isn’t as overwhelming as you thought it was.
Read part 1 of Angie’s Living on $30,000 Best Frugal Tips on Thriving and (not just surviving) on $30,000 a year!
Part 2 – Basic Home Budgeting
Part 4 – How to Not Spend Money
Part 6 – Money Management Skill
Part 7 – Why Couples Should Talk About Money?
I am a stay at home mom and happily married to my husband Tom. I have a five year old daughter and a two and a half year old son. I grew up in Orlando, but went to school in New York City and lived in Los Angeles before moving home to raise a family. I have worked in the film industry since the early nineties, and for over a decade with the Florida Film Festival. I also spent many years working in marketing with Glaceau and Honest Tea. But, I am happiest at home building my family.
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