How to Create a Successful Budget

Ever create a budget only to realize that at the end of the month, you didn’t stick to it?  Or maybe, it feels like you might have missed a step in the process?  This very thing used to happen to me for years- where budgeting felt like a wild estimate or hypothesis of what you HOPE to happen.  Through trial and error, I have discovered some of these super helpful foolproof budgeting secrets that have helped me stay on track and successfully create a budget that you can stick to.

You will need:

  • Courage
  • Calculator
  • Bank Statements
  • Credit Card Statements (if applicable)
  • Paper
  • Pen
  • Excel Spreadsheet (optional)

1. Factor in Everything

And I do mean everything…even the little splurges “here and there.”  As daunting as this may seem and a bit shocking at first, things will start to finally make sense on the budget sheet.  Trust me!  I suggest writing this down on a sheet of paper or the excel spreadsheet (my personal favorite budgeting tool ever!)  Your bank and credit card statements will definitely help make a good assessment of real expenses.

2. Sort Out Expenses

After you have looked through your bank statements to average out about how much you actually spend in a month, it’s time to set up categories: income verses outgoing expenses.  List all expenses with the due dates noted.  Then, for every pay period, you are going to list outgoing expenses according to the date due.  Now that we have reached this point-  check the difference between the income and outgoing to ensure that everything balances out.  If not, prioritize accordingly.

3. Create Cash Allowances

This is the pinnacle of ultimate budget success!  If you have managed to go through the overwhelming process of summing up your expenses, I have no doubt that you are ready for this step.  You are going to create an additional category: cash allowances.  I suggest putting all expenses that are not bills under this category (i.e. clothing, restaurants, groceries, grooming, etc…).  This amount should be consistent most months throughout the year and will assist with keeping you on top of your expenses.

4. Build Savings for Future Expenses

Whether you plan to make a trip overseas, get out of debt, or build savings, this is just as important to factor in the budget sheet as you do bills.  Planning ahead for future expenses and saving over a period of time, can alleviate a load of stress by the time the event occurs.  Out of all the things that are completely out of our hands, this is one that we can grab hold and concur with a bit of planning ahead.

 

Let me know if this post helped tackle your budgeting process or other ways that have helped.  🙂

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