How to Set a Budget
If you are living pay check to pay check and are always trying to scrape pennies for your extra coffee, you can stop without having to get a second job or changing your living situation. All it takes is setting a budget to see where you are at financially. This is an easy task to do and will let you have a realistic view of how to change your living situation.
1. Figure out exactly how much you make per month. This is simple if you have a pay check that comes in once a month. Add in your partners, if needed as well. If you have any extra, steady cash that comes in, make sure that you add this as well.
2. Grab all of your bills and add them up. You will want to have two lists with this one. The first is the individual amounts of what you pay per month. The second will be how much you owe total on all of them. Make sure that you have totals for all of the payments you have made.
3. Add up extra spending money that you have. Be sure to include food, entertainment and all of the other things that you love to do. Then, add this up with the bills that you have.
4. Take the amount of payments you have and subtract it from the amount of money that you have coming in. That is how much you should be spending on ‘the extras’ every month. If you are with a positive number, congratulations. You can keep up on your payments and it will probably be wise to save some of the extra cash every week or over pay on your bills - just in case.
5. If you are in a negative number, it’s time to figure out where you need to cut back. You may need to wipe out some of your bills or find ways to re-consolidate it. Or, you may need to cut back on the entertainment for a while until you get into the positive. If you cut and paste a little, you can figure out how to move back into the positive number.
It’ just that simple. You don’t need an accountant or a miracle in order to keep up with your bills. Figure out where you are spending and how much you should be spending and everything will be back to normal.
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