Want to know how to prepare a budget? Then you’re in the right place.
Even if you can count Money even in your sleep, it’s not easy to create a reasonable budget. The first step is always the hardest – you need to figure out what you have to spend and count everything. Once you get there, you’ll have fun and save yourself a lot of money.
How To Prepare a Budget:
1. Find out how much money you earn each month.
If you have a fixed salary, it will be easy. Just look at your paycheck, and you will be clear. But if you work as a tradesman or pay you an hourly rate, you will have to count it. Find out how much you earned in the last six months and calculated your average earnings. If you want to be sure, take the lowest income in the previous six months. You will have some reserve and get better results.
2. Find out what your monthly expenses are.
How much money do you have to spend each month? Rent, insurance, instalments, bills, etc. – expenses that are repeated each month. Everyone write and add them. Look again at the numbers you wrote. Have not you forgotten about spending? Do not you send charity money every month? Do not you pay a bus ticket each month? You must enrol all these expenses. Include also the money you have in stocks and other financing plans. If it’s money you have to pay, add them in your monthly earnings.
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3. Write down your daily expenses, such as food and entertainment.
In addition to regular monthly expenses, you must not forget even the daily ones. Try to find out how much money you spend on gasoline, food, cinema, shopping and more. If you are not sure, write down a little more to reserve. You can categorise your spending, for example in smaller categories – transport, food, clothing, entertainment. The advantage of smaller groups is that you can easily track expenses and determine the money you can spend in that category.
4. Have some reserve for unexpected losses.
Every month something happens that we do not count on financially. A birthday celebration of a friend requires a gift, a car breaks or something else. You should also keep the reserve on these things in the budget. If nothing happens like that, you’ll have more extra money at the end of the month. If you can not afford this reserve, try to think again. Sure you can save a few hundred crowns. It is enough if you have, for example, a thousand heads and you will have a more comfortable life.
5. Write down everything or make a table on your computer.
You can use Excel, download a budgeting program, or use paper and pencil – it’s important to write it all.
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6. Decide how much money you want to save each month.
When you know how much money you spend each month (in this case 1000 USD, decide how much money to save.) It’s good to save 10% of all revenue, but if you can not afford it, keep it as you like. If you were to save 10% of your 10,000 earnings, you would have to save $ 100 each month to your savings account. With the rest of the money, you can do what you want.
7. Keep up with your budget.
When you know you have to spend about $ 100 per meal every month, you can count on it and adapt it to your lifestyle. Every week you can buy food for 100 USD. Think about what limits in each category you have and start living according to your budget. You have to decide whether you will include food in the restaurant in the food category. If you have to come in with food in restaurants, do not forget to do so. This is true for everything – not just for food. If you have a 50USD for fun, do not ignore it. One drink in the bar and you are at 5 USD ticket to the cinema, and you are for $20 Every time you spend money, you should adjust your budget. Write down everything to get an overview.
8. Find out if you have set the right budget.
It’s easy not to realise how much money you spend. It may be that you pay every month for fun even 50USD without realising it. It is important to think what you can save. If you do not have 50USD, try 30USD for fun. If you reach your goals, you can edit your budget as needed. Try to eat more at home, walk less into bars and restrict cinema visits. If you have to move money to another category, it does not matter at all. You will surely find a category where you can save something.
9. Keep track of your spending and keep an eye on your budget.
In the month, watch how much you spend. Only thanks to this will you be able to work with the budget and only to find out if you have set the appropriate budget. You may find that in some categories you spend even less than you have placed! It will not be fun, but it will be worth it. If you do not, your budget will be useless. Write down every day what you have spent. At the end of the month, the budget should have enough money left for you to enjoy something extra.
10. Set short-term goals.
If you want your budget to be sufficient, it must make sense. Define your goal to have what you work on. Otherwise, you will not have fun. Try to spend at least one month in each category less money than you have determined for it. Perhaps you can save 40USD, maybe 70USD. When you finish your goal, spend the remaining money for it.
11. When the price of gasoline rises, you get added, or you increase your rent, you will have to adjust the budget.
If you have to pay more than $1,000 a month, you will have to take some of the categories to get some budget to balance. It’s not pleasant, but it’s the only way to make sure the budget works. When you learn to walk, it will be easy for you. At first, it may sound a bit unpleasant, but in a few months you will be spending the budget naturally, and you will invent new ways to save money.
12. Spend the money you have allowed to spend.
The budget is beautiful; if you do not spend the money you put on your clothes for the month, you’ll have enough money at the end of the month to pay as you like. Without a budget, you would probably have said that you do not deserve such a thing. Therefore, it is better to have more categories. Within a month, it will make it easier for you to watch spending and at the end of the month, you will be able to enjoy something extra. Even if you feel that you can not afford to spend money on waste, you will soon find the cash for at least some dessert or something kind to yourself. These little things keep you above water.
13. Set your long-term goal.
Setting a longer, longer-term goal is good. Take the money you have and deduct from it the money you owe. If you get into a minus (as well as a lot of people who have loans, etc.), you should set the goal to repay all debts. When you repay each month, you will gradually get rid of the debt and get to the plus. This makes life a little easier for you every month. Once you get accustomed to the budget, you will get a little less money every month. You will see that you will be able to pay off and finally you will say, “I can not wait to see how much money I have saved this month!”
14. Play your game with yourself.
When you have a budget for the past month, try to say that you’ll be even more trying out the next month. Try each month to humble your results from last month and compete with yourself. You never know what you can do until you try it. Do not forget that you should still have fun. You do not have to have big coffee and two desserts every day, but you should not deny your morning coffee to save you. It’s about finding balance and discipline.
15. Find a friend who will keep your budget with you.
If all your friends are unpractical and have trouble spending, it will not be easy. Try to find someone who goes with you. Every week, get together, get a movie and have dinner. You will not go out so often, and you will not spend expensive drinks, but at the same time, you will enjoy someone’s company. Also, it is modern to have a budget and stick to it. Many people try to save on food, produce their items and use discount coupons. There are already full TV stations and websites that deal with the investigation.
16. Reward yourself.
When you manage to keep your budget for a whole month, reward yourself with something. If you have spent a lot of money in the last half year, go on a holiday or take a break and go shopping. Give yourself the whole cake or go for a massage! Be aware that you should stick to your goals. If you save on a trip and then drive on it, it’s not the same as paying a credit card debt and going for a vacation. Reward yourself with something that will not cost you more money than you have saved. For example, you can take a day off, go to a beach or have some good food.
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