Money, money, money, you never have enough. It’s all about the money. Budgeting is how you manage your money. Budgeting is very important and essential for debt free living, its one of the best skills you can have in life. Just follow these steps and you should be alright
Step 1
The first step is to see what you spend your money on. Keep a note of everything you spend over a set period of time usually a month. Make sure you write down everything. If you don’t want to write it down straight away then hold onto your receipts and you can do it all at once at a later date.
It is possible that you will have some expenses that aren’t as regular as every month. These still need to be considered, so take not of how often they occur each year. After you do this divide them into smaller monthly installments. For example if you pay £30 every 3 months for your football team then this could be divided into £10 a month in your budget.
The most important thing is to be honest. If you embarrassed by how much you spend on one particular thing it doesn’t matter. It will help you in the long run if you write it down anyway and you will eventually save more money.
Step 2
The next step is to record all the money you receive in a month. Record every last penny you get that month. It could be wages form a job, from your parents or even birthday money.
Step 3
Make a budget and the best way to do this is to make one list of how much money you earn each month, and another of what you need to spend it on. Then decide a reasonable figure that you can afford easily to spend each month.
Include things like the following:
* Mobile telephone costs (contract or pay as you go)
* Transportation
* Food and drink
* Clothes
* Toiletries or cosmetics
* Any courses, classes, or memberships
* Magazines or newspapers
* Books, cds, and dvds
* Entertainment - cinema, going out with friends, etc
* Gifts - birthdays, holidays, and other presents that might come up
Then have columns for each month, and at the end of the month write down what you actually spent in each area. Some might be more than you'd allowed, and some might be less, but hopefully it will balance out.
Step 4
The final step is to look back over your budget. Look at what areas you are overspending in and what adjustments are needed. This is the perfect time to see if you can afford to save any money and then shift this to your bank account.