Budgeting Made Easy

The worst feeling in the world is knowing that you are getting paid tomorrow and your check is already spent! Yes,of course everyone is happy about spending their hard earned money on bills, but its always nice to have extra cash too.  In order to be able to spend money while living on a fixed income, it is important to budget.  Since most budgets just do not work, I have come up with some tips for smart budgeting that have helped both me and a few of my friends.

1.  Get a Calendar. Yes I know, so old school, but visual aid definitely works better than anything so sit down and begin to organize. The first thing that you want to do is make a list of all of your bills along with a list of the due dates.  Then, you guessed it, add them to your calendar with your pay dates marked so you can see what bills are due during your next pay period. Simply, total your bills within a pay period, subtract the total from your check, and you have the total of disposable income.

2. Only Expense Your Bills. The BIGGEST mistake that people make when budgeting is to add in the expense for gas (fuel) and food. Your bills are your priority so those should be paid first, no excuses! Whatever you have left over is the money that you have to spend. Sadly, if its $20, there is only $10 for gas and $10 for food but your bills will be paid! Hopefully you are not in this hypothetical situation.

3. Pay Your Bills On Time! When you receive the bill, pay it. If you push bills off or borrow money to pay something, you will start to dig a hole that will be tough to climb out of. Your credit will also take a hit if you are constantly late on payments. Your credit score may not seem important but it affects your ability to get approved for credit, services, and even impacts what you pay for interest on credit cards. Be smart with your credit because it really does matter!

4. Track Your Spending. If you always end up broke, the best way to see where your money goes is to track your spending. If you are eating out too much or shopping too much, it will be easier to spot the habits if you are writing it all down. Regulation on personal spending begins with knowing where your resource are going. Balancing a checkbook is a great way to track spending also. It also helps to avoid over drafting your account. I use Excel to track my budget and it works great because the math is done for me. 

Here's an example of the template that I made with Excel

5. Plan Your Budget In Advance. When you are planning a budget, you are really planning to commit to a lifestyle which includes not spending every dime that you earn. Unexpected expenses come up and it's important to be able to cover those costs. One pay period you may have a few hundred dollars left and two periods later nothing. Always be ahead of the game.

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