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When to budget:
Before
we get into how to budget, let's first look at when to budget.
It's
always the right time to budget. In fact, if you take it real
seriously, you'll be thinking of it in your sleep.
You don't have to get real detailed, unless that is how you want to do it.
The best way to start is KISS. Keep
It Simple, then as time goes on add to
it.
To
start with getting stuff together (bills, income stubs, etc.) and initially
setting the whole thing up might take a little time out of your day, but
after you get going it won't be a second job. It really shouldn't be
that much time consuming.
How to budget:
To get started, you need to identify those items/bills you want to
budget. There is nothing wrong in starting out slow and see if what
you are doing is going to work for you.
The way I started was to take big ticket
items, and of course my net pay, and see if I had enough to pay for them on a
monthly basis. Well I did and so I added a few more expenses.
I used an Excel
spreadsheet and made two vertical columns, one for the categories and the
other for amount- It looked something like the
example on the right.
I listed the
categories on the left side of the spreadsheet, then the amount adjacent to
each category.
I just had mortgage,
utilities, cable, car, credit card, and income.
You'll notice the
first thing I budget for was savings. Savings should be very close, if not the
first item, under expenses in your budget. You make it, you should keep some of it.
How much you save
will obviously be dependent on a lot of things. But don't forget
investments and savings should be a key priority in your strategy.
Starting out
with fewer items shouldn't be a problem. You've
been going without a budget all this time so a little longer probably won't hurt.
The whole idea is to
start out at a comfortable number of items in your budget and add to it over
time. Getting a grip on your income and expenses will really help out in
your investing scheme.
As time went on I
added all the other bills and finally had everything.
If you want to copy
the
category starter set for your personal use you have
our permission. For those that want to copy them for commercial use- to
display on a website or newsletter, you may copy them if you also copy the
Market-Barometer link sentence and keep it active while displaying the examples.
If you want to get
more sophisticated than using a spreadsheet, there are products you can
purchase. Check your computer. Sometimes software that comes with your
PC could have budgeting software bundled.
But if your
budget-minded like me you will choose a spreadsheet.
NEXT:
Getting started with the
spreadsheet
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