Many people go about their lives without budgets and they do just fine. However, they could probably be doing better if they had a budget. Setting up a budget for yourself is a very handy tool to help you stay out of financial trouble. It helps you keep track of what you are getting in and what you are giving out. That is after all the basis of it all. You need to get more in than you give out. We have compiled a basic guideline of how to get started on setting up your budget.
Gather all your information
Get bank statements and payslips that will give you information on what money is going out and what is coming into your accounts. From these statements, you need to compile your expenses and income once you have a spreadsheet set up. Write down all your debit orders, rent, car payments, etc.
Use software or Excel
Consider getting software that will help you set up the budget. You can also use Microsoft Excel if you have it. They have basic templates to get you started. This is also handy in creating a spreadsheet.
Once you have your software set up and you have written down your expenses and income, compile the data into the software or spreadsheet. If you are using a template or software, it should calculate your totals for you.
Study your results
Carefully look at what the spreadsheet is telling you. Are you spending more than you are earning? Where can you cut spending or increase income? The spreadsheet will show you all this information.
Set up your budget
The next step is to set up your budget. All your recurring monthly expenses need to be covered. You also need to remember to include planning for groceries, gas, entertainment, and other extra expenses. Once you have all this up, you should be able to see where you need to cut expenses if you are not breaking even or going over budget. Adjust until you are happy.
Once your budget is done, the golden rule is: Stick to it!