The Budget

The MOST important, yet most difficult part of saving money. The Budget.

A budget is an intimidating thing if you haven't done one before. Simply put though, you take your income and "spend" it on paper right before or soon after you receive it. You can make it as simple or as complicated as your personality or time allows.

A simple budget would be:

Income: 3000

Spending:
- Rent : 1000
- Utilities : 400
- Food : 400
- Car Payment: 500
- Insurances : 400
- Misc : 200
- Savings : 100

Remaining : 0

This is obviously ridiculously simplified but you get the point. If you wanted to get even more complicated break utilities down to water, electric, phone, internet, cable, etc. Budget only so much for each and then use that to motivate you to use less water or turn off lights around the house. For the Food budget I personally count anything I buy at the grocery store as "food". This means that all my toiletries, health and beauty, etc gets lumped under food. As a result my "food" budget is rather large, nearly $700 a month.

Now, to keep yourself on budget you need to track it. There are literally hundreds of budget programs, forms, and systems you can find. I use an excel spreadsheet that I keep on Google Documents, this lets me access it from any computer anywhere. Basically, whatever you decide, you need to make sure EACH and EVERY purchase you make is counted against that category. One of the easiest ways is the envelope system. If you budget 400 a month towards groceries, then put 400 from your paycheck into the envelope and only use what's in that envelope to buy groceries. If you run out, you either need to get creative with what you have at home, or take from another envelope. By physically watching your money dwindle you're less likely to spend it. If you use your debit card to make most of your purchases then simply putting a written budget up on your fridge and writing down all your purchases may work well for you.

End of the day, it doesn't matter how you budget, simply that you do. If you don't budget then your money will fly right out the window and at the end of the month you're going to be confused and bewildered that you ran out of cash a week early and had to charge food, gas, etc just to stay alive. Don't be surprised if it takes a few months to balance out your budget, keep to it, and find what numbers actually work where. If you've never done one, then you're going to need practice. Just do your best, stick with it and always check your budget before spending anything that you WANT and remember that your NEEDS should already be in the budget.