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.
Income is probably the easier of the two to calculate. Most of us just have our weekly or bi-weekly paycheck, but this will also include interest income, dividends, investment gains, tips, bonus, etc.
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.
Start budgeting using software, spreadsheets, or a simple notebook and pencil. Plan out how much you will spend each month on each item. Be as specific as you can and you will make the whole process much easier for yourself. Budget specifically for entertainment, books, clothes, etc.
Contrary to popular belief, budgeting is not hard at all. If you do it the way you understand the most, you can follow it how it works for you. What’s great about budgeting is that you can do it the way you want and still be able to spend on things that are wants.
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