How to do a Budget

by : Bob Guy

How to do a Budget

Are you running out of money on a regular basis?
Incurring debt isn't the answer to your problems. A lot of people find it hard to save for a rainy day and even more find it difficult to do and stick to a strict budget. Some people are really good at successfully adhering to their budgets and still find that they occasionally run out of money. This can be very frustrating. You may be tempted to give up, but don't. 

How to do a Budget
Here are some tips on how to do a budget and help you stay afloat and avoid many of the common budget planning mistakes that are so easy to make. 

Take note of these 2 pointers when you do your budget

  • Do a Budget that fits your spending habits
    When doing a budget, pay very close attention to a budget that fits your spending habits. Think about keeping your budget realistic. This is a good base for creating a set of rules for yourself.
  • Do a Budget that wont force you to break the bank.
    The purpose of the budget is to discipline yourself into not breaking the bank from paycheck to paycheck. Most people spoil themselves a little more often than they plan to and find themselves in a situation where they thought they had enough money for the month and they run out earlier than expected. 

How to do a Budget
Simplify Your bills

  • If you pay only the amount that is due every month for your utilities and credit cards, you will find yourself not ever fully knowing what to expect. If you pay a set amount every month, then your bills are always the same.

    I like to round up the amount that I owe. If my cell phone bill is usually $62 per month, then I will pay $70. All of my bills add up to a round number that is easy to keep track of. Plus, as an added bonus, if I run into trouble one month, I've overpaid for the past few months and I may not have to pay that bill at all, or I'll owe significantly less than I normally would. 
  • Figure out what your power, electric, water, sewage and other utilities added up to for the last year. Let's say that you paid $3,764 for your utilities last year. Divide that amount by twelve months and you get $313.66 per month. Round up and actually pay $400 per month. If you can afford to do this little bit extra, then you'll enjoy two months off of paying bills every year. In ten months, you'll have paid $4,000. That's a little more than your bills may actually be, but it should take care of small fluctuations that may occur. You can take a month away from paying bills in December for Christmas, and also in the summer for a vacation. This is one way to circumvent the fluctuation problem that arises in most traditional budgets. 
  • Watch what you spend and take everything into account. Don't forget oil changes, probable auto upkeep, medical expenses, clothing and money to go out and enjoy yourself. Set money aside in various accounts tagged for certain things. Enjoy sticking to your budget. Don't see it as a harsh discipline system, but as a self-rewarding system that you are in control of.

Avoid Debt When Doing Your Budget
When you do your budget, remember to avoid revolving credit card debt that can drag you down. If you need short-term cash to tie you over, try getting help from family members instead of taking payday loan or cash advance.

How to do a Budget
To summarise, create a budget that fits your life, your spending habits, doesnt break the banks, keep it simple and it could really pay off.