How To: Budgeting for Beginners
Many of us shy away from talking about MONEY, but not anymore! Learn how to take control of your money with this budget for beginners.
Some of us have probably made the same financial mistakes, and wouldn’t know, because we’re not talking about it. I should have been budgeting long before I hit the 30 mark but hey, it’s better to start late than NEVER!
In this decade I’m working to gain control of my finances.
How to Create a Budget for Beginners
Start by writing down your income and expenses. Write down what you bring home every month, after taxes. Make a list of all your bills and expenses. Don’t forget to include groceries, gas, internet, and other living expenses. Be sure to write down when bills are due, to ensure you’re able to pay them on time.
Subtract your expenses from your income. That number is what you have left to save and spend on entertainment. Decide how much you’d like to set aside for entertainment, and subtract that.
What’s left is your savings. I like to set aside some for general savings, and the rest for an emergency fund. You can use your emergency fund for unexpected expenses like a flat tire or a medical bill. That way you don’t dip into your savings when you need some extra cash.
Now, divide your income, bills, entertainment, and savings by four. That will help you plan week by week.
Sample Budget for Beginners
Let’s say I take home $4,000 a month after taxes. My bills are $1200.
That leaves $2,800 for entertainment and savings. For this example, we’ll set aside $1,000 for entertainment. So, we’ll save the other $1800. Now, we’ll divide everything by four to create a weekly budget.
For this budget we’re bringing home $1,000 a week.
That $1,000 is split up to cover bills, entertainment, and savings. Now, say one week you only have one $50 bill due. Pay that bill, and carry the remaining $250 over to the next week
Doing that will ensure you have enough money available to cover your bills for the following week. Transfer your savings into your savings account every week to ensure you’re not overspending.
Creating a Budget Helps You Control Your Money
Knowing what you have, and don’t have, will help you spend more wisely. Do you budget every month? What are some of your tips?
Let’s talk about it in the comments!
