Finance 101: How to Create A Budget

money

Growing up means independence. However, there is also new responsibility. An easy way to simplify your life? Create a budget. It sounds boring, but honestly it requires almost no maintenance and very little time to actually do. Here’s a simple way of creating a budget:

Find Out How Much Money Is Coming In

This is the easiest thing to do. Total up your paychecks, or if you are receiving money from your family, total up how much they are giving you. It is worth knowing how much you have saved in case of an emergency.

Total Your Old Bills

This one is a little less fun. Go through your old bills. Look back every month or every three months at everything you have spent money on. You will notice trends and and can figure out the average or the most you spent in the span of a few months. This way you can determined how much money you need to save every month.

Think of Upcoming Expenses

If you have tuition or a trip coming up, that will use up a chunk of the money you are making. You don’t want to spend what you don’t have. Plan for the future so you do not overspend and get blindsided.

Find How You Can Save

If you are spending more than you are bringing in, you will be out of money before you know it. The bonus of looking at your old bills is to see if you are spending too much money, and if you are then you can cut back. It’s always good to see where you’re money is going. If you don’t like what you see, you can change how you spend. Also, you can figure out a percentage of your money to save for later.

Set A Goal For Your Money

Now that you know how much money you have and how much money you are spending, you know how much money you have left. This could be spent on going out to dinner or for a more ambitious goal like buying a car or going on a trip. Plus, it never hurts to have an amount set aside in case of an emergency. 

This will keep you out of trouble with overspending and ending up in debt. More importantly, you will know how much you can spend having fun. Once you have a budget, you don’t have to worry about it and you just adjust with the big changes in your life.

Image: Sumall