Creating a budget that you can stick to will allow you to see how much money you have coming in each month (or week) and know which bills need to be paid. A budget will also make you able to predict upcoming expenses and allow you to see which areas you can save money in. If you plan your budget properly you’ll have money left over at the end of the month even after your bills and debts have been paid.
When creating a budget you need to have all of your monthly expenses in front of you to see which ones you have. For things like food and fun setting a monthly limit will free up a ton of money to pay for the things that are more pressing, such as credit card bills and rent. When you total all of your expenses up as well as your monthly income you can see whether or not you are making enough money to cover everything. If you are not, it’s either time to shave some expenses or figure out a way to make a few more bucks each month.
After all of your expenses have been totaled, you can either make a paper copy of your budget and keep it with you, or make a digital budget that can be in the form of an Excel spreadsheet or an online program. I prefer the spreadsheet version since you can create formulas so that it does the addition and subtraction for you. Another helpful idea is to create a calendar that will show you what time of the month each bill needs to be paid. If all of your bills land at the middle of the month, try to spread them out towards the beginning so that you don’t go broke between paydays.
Making a budget is an easy way to manage your personal cash flow. Without it is like driving with your eyes closed, you never really know what’s going on and there’s a good chance you’re going to crash!