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.
Now, write down where you get all your income and how much. This will include your monthly job wages, any bonuses or tips, interest income from investments and savings accounts, other investment income, and any other income sources. These all added up are called your monthly cash inflows.
Your cash outflows include all your expenses. Add up every penny you spend in a months time. Add together rent or mortgage, food, entertainment, gas, and anything else. Add everything you spend whether it was paid for by check, credit card, or cash. Include absolutely every expense being as specific as possible.
By taking the difference of these two values you will find your net cash flows. If you have a positive net cash flows, this means you have extra money. Lets say your net cash flows is $500. You have $500 extra every month after all these expenses. You might normally put this into savings or investments.
When you subtract the numbers and get a negative number, this means you are losing money each month. You are creating debt for yourself. Add in the interest that your debt is continuously collecting and you are losing even more money. A negative net cash flow is bad, especially if it's a large number.
If you break even, you really arent in a great situation either, unless you are including money invested in your expenses, which you shouldnt for now. No matter what situation you are in, you need to go through your expenses and see where you can cut back.
To keep up a budget, you need to continue to record all your income and expenses every month. After youve gone through everything and found where you can cut back, make sure you only buy where you have allowed 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.
Now, write down where you get all your income and how much. This will include your monthly job wages, any bonuses or tips, interest income from investments and savings accounts, other investment income, and any other income sources. These all added up are called your monthly cash inflows.
Your cash outflows include all your expenses. Add up every penny you spend in a months time. Add together rent or mortgage, food, entertainment, gas, and anything else. Add everything you spend whether it was paid for by check, credit card, or cash. Include absolutely every expense being as specific as possible.
By taking the difference of these two values you will find your net cash flows. If you have a positive net cash flows, this means you have extra money. Lets say your net cash flows is $500. You have $500 extra every month after all these expenses. You might normally put this into savings or investments.
When you subtract the numbers and get a negative number, this means you are losing money each month. You are creating debt for yourself. Add in the interest that your debt is continuously collecting and you are losing even more money. A negative net cash flow is bad, especially if it's a large number.
If you break even, you really arent in a great situation either, unless you are including money invested in your expenses, which you shouldnt for now. No matter what situation you are in, you need to go through your expenses and see where you can cut back.
To keep up a budget, you need to continue to record all your income and expenses every month. After youve gone through everything and found where you can cut back, make sure you only buy where you have allowed 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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