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Budget Basics

Creating a budget is a complex matter we will only scratch the surface of here.
Creating a budget usually involves three steps:

• Identify how you are spending money now.
• Evaluate your current spending levels set goals to achieve you long term purchase goals.
• Track your spending so it stays within those guidelines.

Here are some tips before you create your budget

• Using software can be helpful and can make the process easier.
• Spending beyond your means is never good.
• Tithe yourself so 10% of your money can be saved for emergencies or bigger items.
• Don’t disguise luxuries like a big new TV as a necessity.
• Spending creep can occur when you make more. Use this extra cash to save money rather than indulge on luxury items.
• Watch for cash leakage, if you find yourself eating out a lot, see if something could be done.

Creating the Budget We are going to create a simple budget. Take a look at the sample budget layout as we fill in the sections.

Income List all your paychecks, in one section
Utilities List these items below (rent, electricity, cable)
Credit/ debt List these items to the right of income (credit cards, car payments)
Necessities List these items below Credit/ debt (food, books, medication). Anything that is necessary for survival or you health should be listed here. You can divide this section into food per week, clothing, and other items. Keeping your spending in track is the whole aim of a budget.
Leisure fun List this as a cash amount. Its not important to list how you will divide this, just important you know how much you can spend.

The idea of a budget is to keep things in balance. Using software can be easier to do this but a paper method can work fine. Total each section and circle it so you can more easily make calculations on a scrap sheet of paper.
With a budget you can see where you money will go and allocate it better. If you track your spending you can see how well you stuck to your budget and make any necessary changes.

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