Have you ever wondered why when it comes to money you always end up with less than you expected? This is common problem with most people. The lack of keeping track of how much you make and how to spend it, has many people scratching their heads at the end of the pay period. Want help that's full proof [as long as it's followed]? Well then let's set you up with a full proof budget.
First things first...what source(s) of income do you have? For most people that's either a steady job or maybe a side hustle that brings in some kind of income. It can be something you sale; a service you provide; or basically any/everything that brings you money. Once you identify your source(s) of income, calculate how much you make in total. So for example, if you only have one job, you would use that one job to calculate your total. But if you have full time and part time job, and income from something you sale, you would use those three sources to calculate your total.
Next, you have to do some thinking...What do you actually 'have' to pay for (expenses)? The common things most people 'have' to pay for would be: rent/mortgage, phone, light, gas, food, etc. Besides the obvious, what most people fail to account for are the minor (really not so minor) expenses that sort of pop up out of nowhere.
Things like...maybe a ticket that you forgot about; something you ordered on the internet/TV; magazine subscriptions; or basically anything that you totally forgot you paid/ordered for (Mainly for credit/debit card purchases). That's why you have to really think about what expenses might come up. A key thing to keep in mind are any fees that are automatically drafted from your bank account. Whether it be a phone bill, car insurance, magazine subscription; or even a free trial offer period on something. These types of things can throw your budget way off. LIST any/everything you can think of...this will really help keep your budget.
Now you have to make some decisions on what you 'can afford' to pay. This takes sort of a constant reminder of how much you can spend. Most people live above their means, but if you're looking to set a budget, apparently you're not trying to live above your means. What do you just have to have and what can you live without?
Here are the common mistakes that people make with their personal finances: https://timebusinessnews.com/as-a-financial-advisor-what-is-the-most-common-mistake-you-see-people-making-with-their-personal-finances/
List the cost of all those things. You should be as detailed as possible. Maybe you can cut back on eating fast food most of the time if its not in your budget. Or be mindful of the amount of miles you drive your car. It will become a sort of changing of life style. Monitoring your spending and where your money goes is the key. Once you have identified the expenses you have to pay for and even some you can afford, make a 'realistic' list...THAT FITS YOUR BUDGET. When you get paid first take out all the necessities (rent, light, gas, etc.) and with any extra account for what you can afford to buy and MOST IMPORTANTLY those sneaky expenses mentioned in the previous step.
The most difficult and important part to keeping a budget is...sticking to it being disciplined! This is self explanatory. When you see something that you want to buy, after setting your budget, you can either stick to the 'plan' or reason with yourself by saying something like 'you know what, I'll just make up for it somehow.'
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