Creating a budget can be a time-consuming procedure as well as confusing if you are not sure how to begin. Technology has helped in making a budget become easier to achieve. Many computer programs can even help you to become well organized. A program such as Excel is great for beginners. The following information will help you get your finances in order.
The first step is to list all of your expenses on your Excel spreadsheet and estimate the cost for the expenses on monthly, bi-monthly or weekly basis. List your expenses in order of importance. This may include rent, gas, groceries, day-care and anything that you pay out for each month.
Organize your budget according to your pay period. If you receive your paycheck monthly, do it on the monthly basis. For example, let us say that a person makes $3,876.57 monthly. His/her expenses are mortgage ($850), gas ($300), groceries ($250), and he/she allows himself/herself an allowance of ten dollars a day for personal items such as lunch, coffee or a newspaper ($300), electricity ($100), water ($50), wireless telephone ($100) and car payment ($350). Adding the expenses together is a total of $2350.00 leaving $1,526.57 monthly for any other obligations he/she may have. Again, it is important to begin with the essentials and to estimate high on items that may fluctuate when starting a budget.
Once you have listed all of your essential expenses—the average over a pay period and the amount remaining—you are able to examine other expenses that you would like to incur, whether it is savings or investments. For instance, if you would like to begin saving for retirement by putting aside $500 a pay period, you would then add that to your list of expenses. Then the remaining of your monthly income should go into a separate savings account for any unexpected emergencies.
After taking notes on all your expenditures and knowing, the in and out flow of income makes budgeting much easier. If you choose to use Excel, you would then open a new spreadsheet and save it as budget. One page should be created to keep track of what you are spending and what you have left.
If you are using Excel, this can be an easy procedure by simply learning some of the basic excel commands or formulas such as adding and subtracting cells. Making your budget easy for you to understand and read is also a bonus; using color-coding or titles that are more descriptive will make this easier for you to follow.
A page within your budget plan should include balances of accounts, when payments are due, minimum payment due and when payments were actually rendered. This may include the balance of credit cards, mortgage or a car note. An example of this could be:
Having this page allows you to view where you stand as far as your long-term personal finances are concerned, as well as keeping track of what you have paid and what you owe.
You may also want to keep track of a wish list or something to that effect. For instance, let us say that you would like to save for retirement, or save for a new home. You may do that by creating another page and labeling that page accordingly. An example may look as shown below:
The important thing about all the different aspects of the budget that you are creating is to make sure they all correlate. If you put $500 into retirement savings, you would want to place that amount on the first page that we created subtracting from the amount that was left from the last pay period. One may also want to make additional pages as needed for stocks or financial goals that may exist. The options for your budget are endless. You could add a pie chart that displays where all of your money goes based on the first page that you created. If you have any questions on how to do that, then excel offers help to utilize it.
If you do not have time to build your own budget, you can consult the assistance of a financial analyst. There are several books available about personal finance. Many websites offer helpful information on how to organize your personal finance. You can also purchase many books about personal finance online.
After you have created your new budget, print a copy and tape it onto your refrigerator door. Those who are successful at achieving their financial goals are those who stick to their budget. It takes determination and discipline to achieve your financial goals. Budgeting takes practice and a lot of patience.
If at first you go do not succeed, there’s no need give up. Review your budget and determine where you went wrong. Practice helps you to reach perfection, especially when it comes to financial planning.
The final step is to stick with your plan so that you can reach your goal of becoming financially fit and fiscally free. As one can see when using organizational tactics through resources available, one can reduce the stress involved in monitoring personal finances. The most important rule of all is to remain well organized by keeping all receipts together in a single area, along with payment booklets, checks and so on. Creating a budget, monitoring your budget and adhering to your budget will help you achieve financial success.