Learn How to Budget
The first step to take when starting a budget is to choose a budgeting method. You can use something as simple as pen and paper, or you could go an easier way by using Excel spreadsheets or a budgeting software program. Any of these will work just fine, but some will be easier than others.
Next, you need to write down all of your income sources. These are called your cash inflows. These include wages, bonuses, tips, interest income, capital gains, dividends, and any other money you make each month. Record these as your monthly cash inflows.
Now add up your monthly cash outflows. These are all your monthly expenses. Add up absolutely everything you spend your money on such as food, utilities, rent or mortgage, clothes, snacks, entertainment, etc. Do your best to try to add up even the small expenses such as your morning coffee from the coffee shop.
Now subtract your outflows from your inflows. This number is called your net cash flows. If it is positive, you are saving money. This is extra money each month that you are probably putting into some kind of savings. For example, if your net cash flows is $200, you are increasing your wealth by $200 each month. If you don't have this much extra each month, you must have added up your columns wrong.
If you have a negative net cash flows, this means you are going into debt each and every month. If your net cash flow is -$200 every month, you are going into debt $200 every month. In actuality, it is more because you are probably being charged interest on the debt you have because its either a loan or on a credit card.
If you get on or around zero, you are breaking even. You're probably happy that you're not going into debt, but your not saving either. If you have no savings put aside and you end up in an emergency situation, you will probably end up in debt. You need to cut back on your outflows so that you can save.
In order to maintain an effective budget, you need to keep recording your income and expenses, at least for the first few months. Look through your budget and wee where you can cut back. Finally, stick with what you are budgeting. Only buy what you have set for yourself.
If you use credit cards, pay off the balance every month to avoid paying interest and make recording your expenses much simpler. Of course, the no interest is the real bonus there. If you have credit card debt, DONT PUT ANYTHING ON OUR CARD! You need to work on paying off your debt and staying away from more!
Continue to follow your budget day in and day out. Keep track of your budget with your notebook or software. Make sure you are saving money each month and set up savings goals for an emergency fund, paying off debt, gifts, vacations, etc. This will help make sure you have the money when you need it.
Next, you need to write down all of your income sources. These are called your cash inflows. These include wages, bonuses, tips, interest income, capital gains, dividends, and any other money you make each month. Record these as your monthly cash inflows.
Now add up your monthly cash outflows. These are all your monthly expenses. Add up absolutely everything you spend your money on such as food, utilities, rent or mortgage, clothes, snacks, entertainment, etc. Do your best to try to add up even the small expenses such as your morning coffee from the coffee shop.
Now subtract your outflows from your inflows. This number is called your net cash flows. If it is positive, you are saving money. This is extra money each month that you are probably putting into some kind of savings. For example, if your net cash flows is $200, you are increasing your wealth by $200 each month. If you don't have this much extra each month, you must have added up your columns wrong.
If you have a negative net cash flows, this means you are going into debt each and every month. If your net cash flow is -$200 every month, you are going into debt $200 every month. In actuality, it is more because you are probably being charged interest on the debt you have because its either a loan or on a credit card.
If you get on or around zero, you are breaking even. You're probably happy that you're not going into debt, but your not saving either. If you have no savings put aside and you end up in an emergency situation, you will probably end up in debt. You need to cut back on your outflows so that you can save.
In order to maintain an effective budget, you need to keep recording your income and expenses, at least for the first few months. Look through your budget and wee where you can cut back. Finally, stick with what you are budgeting. Only buy what you have set for yourself.
If you use credit cards, pay off the balance every month to avoid paying interest and make recording your expenses much simpler. Of course, the no interest is the real bonus there. If you have credit card debt, DONT PUT ANYTHING ON OUR CARD! You need to work on paying off your debt and staying away from more!
Continue to follow your budget day in and day out. Keep track of your budget with your notebook or software. Make sure you are saving money each month and set up savings goals for an emergency fund, paying off debt, gifts, vacations, etc. This will help make sure you have the money when you need it.
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Get further info and specific details on how to budget. If you get stuck, you can Get more info in better detail on how to make a budget.
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