The Basic Steps for Building a Budget
If you want to start living a more frugal life, you will need to start the process by doing some important planning. The most important part of planning for your finances is making a solid budget. Regardless of how much you make, how you make it, and how much you have now, you can make a budget that will work for you. Consider the following steps that will help you take the first step to a thriftier lifestyle: making a budget.
1. Write down your spending. You can't plan out how you will spend your money until you know how you are spending it at present. Carry around a small notebook for a month and write down every purchase you make. This will help you see how your money is disappearing.
2. List out your expenses. This will include monthly bills as well as the money spent that has been written down in your notepad. Organize the purchases you have made into categories and then total them up to see how much you have spent.
3. Write down how much money you make and how often you receive it, whether that be on a weekly, bi-weekly, or monthly basis. Then total up how much you earn.
4. Based off of the information you have gathered during the last month, make a budget. Once you have it written out, compare it to your total income and make any necessary adjustments so that your income is more than your budget is, either spending less or making more money.
5. Take some time to think about the budget you have planned. You might find some that some changes need to be made. For instance, if you tend to watch a very small amount of TV each week, you might decide that you don't need to pay for cable each month. If your closet seems overly full, plan to shop less.
6. Once you have cut out all possible expenses, look at your budgeted totals for earnings and spending. If you still wind up spending more than you earn, you might consider getting a better or second job. Your budget will not be able to help you save money if you plan to spend more than you earn.
7. Review your budget. Since our lives are in a constant state of flux, your budget will no doubt need to be adjusted from time to time. As your lifestyle gets progressively more frugal, you may notice more expenses that can be cut.
Having a keen understanding of your own spending habits will enable you to live frugally, successfully. Making a budget and sticking to it is an essential first step.
1. Write down your spending. You can't plan out how you will spend your money until you know how you are spending it at present. Carry around a small notebook for a month and write down every purchase you make. This will help you see how your money is disappearing.
2. List out your expenses. This will include monthly bills as well as the money spent that has been written down in your notepad. Organize the purchases you have made into categories and then total them up to see how much you have spent.
3. Write down how much money you make and how often you receive it, whether that be on a weekly, bi-weekly, or monthly basis. Then total up how much you earn.
4. Based off of the information you have gathered during the last month, make a budget. Once you have it written out, compare it to your total income and make any necessary adjustments so that your income is more than your budget is, either spending less or making more money.
5. Take some time to think about the budget you have planned. You might find some that some changes need to be made. For instance, if you tend to watch a very small amount of TV each week, you might decide that you don't need to pay for cable each month. If your closet seems overly full, plan to shop less.
6. Once you have cut out all possible expenses, look at your budgeted totals for earnings and spending. If you still wind up spending more than you earn, you might consider getting a better or second job. Your budget will not be able to help you save money if you plan to spend more than you earn.
7. Review your budget. Since our lives are in a constant state of flux, your budget will no doubt need to be adjusted from time to time. As your lifestyle gets progressively more frugal, you may notice more expenses that can be cut.
Having a keen understanding of your own spending habits will enable you to live frugally, successfully. Making a budget and sticking to it is an essential first step.
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