Are you tired of spending all your disposable income and winding up with no money once payday comes around? Creating a personal budget isn’t the most exciting thing in the world, however, done well you can save plenty of your income so you can start adding more money into the savings and expenses you want rather than being broke at the end of the month.
Here are five steps to develop a personal budget that you can live with.
When you are putting together your personal budget, you need to know how much you are bringing in each month so you can then work out your expenses both fixed and variable. Figure out any income you are receiving from your pay packet, compensation, child support, salary and any other source, so you can figure out your net income.
Now you need to write down your fixed monthly expenses including mortgage or rent, transportation or car payments, insurance for your car, fuel costs, electric, gas, sewage, telephone or cell phone bill, student loans, personal loans and credit cards. You can also include expenses such as child care expenses, association payments and any other cost that you may incur each month on an ongoing basis.
Once you have outlined your income and your expenses you need to subtract your expenses from your net income, this will give you a figure you can work with for your leftover cash each month, and this will allow you to get more information when you’re setting up your budget.
Each month you might have costs that vary that you can’t really plan for, however, you should have within your budget some allowance for variable expenses so that you always have some spare cash as needed. Focus on this amount and ensure that when you have considered your fixed expenses and variable expenses you still have some money left over for savings.
You can never really create the perfect budget and you should consider that when you are determining your budget things will change and you will need to be a little flexible so that you can enjoy your life and have cash in the bank to live life to the full.