Making a budget can sometimes seem like an overwhelming task for someone that has never done it. You may think it is a lot of work or is too complicated before even sitting down and trying to put one together. The truth of the matter is that creating a budget is not only easy, but it can also be very enlightening.
When it comes to creating a budget, most people just don’t know where to start. Some even think you need to be a CPA or have a degree in finance to create a budget. But putting together a budget can be done by just about anyone.
The first step to any budget is finding out where you stand. This means making a list of all of your income sources and all of your expenses. This will help you determine exactly how much money you are taking home each month and how much you are spending.
Finding out how much you are bringing home is pretty easy. Simply add up all of your paychecks for the month and you should have your total. The part the trips many people up is putting together their list of expenses. When you are listing your expenses, make sure you include everything such as your car payment, house payment, utilities, cable, internet, food, and entertainment. If you carry balances on your credit cards, be sure to include those payments as well.
After you have totaled up your income and expenses, simply subtract the expenses from your income. If your expenses total more than your income, then you have a problem. You are either going to need to increase your income or more than likely, reduce your expenses. But at least you will now have an idea of how much more you are spending than what you make. Then it is just a matter of deciding which expenses you need to reduce.