There are some people who think budgeting isn’t necessary because they keep track in their head how much they spend and feel they have a handle on it. I used to be one of those people until I decided to get serious about saving and then I decided to put together a formal budget. When I finally put everything down on paper I was surprised at how much I was really overspending each week and month. Those little things you might spend $1 here, $2.50 there on add up VERY quickly.

I am challenging you to give it one chance. Try to put together a budget one time and see if it makes sense for you. You have absolutely nothing to lose.  If you haven’t already attempted at putting a budget together it might seem like an intimidating thing but I’m going to give you a quick and easy way to start off. Then you can go as far with it as you want from there.

Let’s get started!

1. Add up how much money you take home every month. So for example if your NET (take home) pay is $500/ week then we can say that for the month your take home pay is $2000. ($500 X four weeks). That’s what we will start with.
2. From that $2000 subtract all of your fixed expenses you have each month. These will be the things that you must pay each month and the payment amount generally does not change. Ex, rent/mortgage payment, cell phone bill, etc.
3. Next, subtract your variable expenses you have each month. This part is tricky because variable expenses vary in amount each month. This would be things like your utility bills, groceries, credit card payments, etc. What I would recommend you do is look at the past 5 or 6 months of bills/receipts and take an average of how much you’ve spent each month and use that for an amount.
4. Now whatever is leftover is what you have left to save with and spend on fun things.

So let’s say after you did the above steps you are left with $400. That means you have $400 per month to use for savings and to spend on things that interest you. Take it one step further and divide this amount by 4. This will give us how much money we have for each week. $400/4 = $100. So now you know you have $100 each week that you can put towards saving and/or spending.

This is just a very quick and rough example of putting together a budget just to get the ball rolling. Once you’ve done this and are comfortable with the numbers  you can add on more to it and put together a full savings/investment plan. Budgeting in things likes saving for a trip or a house down payment. The sky is the limit. Let me know how it works out for you or if have questions send me an email. Always here to help. There are also a few apps you can download that can make things easier. Take a look in your app store and try a couple to see which one you like best.