Creating a Monthly Budget

Budgets are not hard to manage and once you set them up you will be happy that you did. Here are simple steps to follow to get you started.

1. Know how much money you’re making in a month after taxes. For a budget plan to work, you need to know the amount of money, so consider every dollar and write it down.
2. Add up your expenses and writing them down.  Record everything from rent, groceries, transportation all the way down to buying an energy drink at the vending machine. Keep receipts so next time you have a better understanding of your expenses.
3. Set goals you’re going to achieve with this budget. Having a goal in mind gives your budget a purpose and you’re more likely to put the effort to achieving that goal because it would be measurable. Think short-term and long-term. Think about what you’re going to do with the money you need to save. Are you going to save up for a car or tuition for next semester? This gives you a reason to save more.
4. Categorize your budget. The purpose to categorize your budget is to help you set priorities your money from the most important expenses to the least. For example: Rent, Food, Transportation and bills would have a high priority to pay off first; than can you pay for Entertainment, Shopping and Miscellaneous activities. After all these expenses that you have built into your lifestyle, you can set aside your money into a savings account. You might have to sacrifice some expenses like shopping or miscellaneous activities to meet your monthly goal. 
5. Add the expenses for each category and have a total for each. For some expense you might need to make good estimates, base them of from your past experiences.
6. Add all the totals from each category. Now that you have a TOTAL of all your spending; compare it with your income.
7. How will you keep track of your budget? Use a basic template on paper or use computer software like Microsoft Money.
8. Input all your Income and Expenses. If your expenses are higher than your income, make adjustments and stop doing the least important activities from step 4.
9. Put the money you save into a savings account and go back to step 1 for the next month.