Anyone Can Do It
There are a lot of different ways that you can budget. Look online for budgeting ideas, and you’ll get hit with hundreds of thousands of pages on the topic. While it may seem easy to work with, why is it so hard for people to budget their money and save? Truth be told, the process that most people take to focus on a budget is boring, and somewhat easy to dismiss. Millions of people start with good intentions, only to end up giving up on their budget, savings plan, and more. If you’re tired of the constant cycle of trying to budget, save, and then giving up, only to try again down the line, you’re not alone. The following ideas are meant to help you get on track with budgeting at any income level, or age. This process doesn’t have to be mundane, nor does it have to leave you with no fun.
Chart Everything Out
Start with the absolute easiest step possible, and it’s simply to chart out what you get paid on any given month. If you have a salary, then make sure that you know the net amount for 40 hours a week, etc. Freelancers may have a harder time with this, but on average, people work 40 hours a week and have steady pay checks. Once you chart out how much money you earn, focus on all of the bills that you have per month.
Make a simple flow chart that shows how much you earn, and in a different column write down your debts per month. This will help you understand what money you have leftover, if any. In most instances, you will not have a negative balance doing this. If you do, then you will need to do more than set up a simple budget, as you could be headed towards financial distress.
Divide Up An Allowance
The next thing that you should do is simple, look at the money you have left over and consider that your allowance. Divide that up into what you want to spend, and what you want to save. Take into consideration any long term savings goals, and any entertainment options that you may not “need” but rather, want. By doing this, you’re going to be able to divide your leftover money into different sectors of your wallet, etc.
Use An Envelope System
One last step that will help you with budgeting and sticking to it is to use the envelope system for your extra money. When you have a set dollar amount leftover, make sure that you take out the amount of money that you want to spend a week, and put it in an envelope. Once you have that, you can separate that cash into separate envelopes for leisure activities, or for anything else you may want. If you don’t spend it that week, then you’ll have more for the next week, and so on.
At the end of the day, you shouldn’t fear budgeting, and you shouldn’t think about it in terms of difficulty. It can be made easy, if you take a deep breath, and focus on the tips above, then simply take baby steps towards financial maturity.