I've took the first step in making a change in my bad financial habits. I've admitted that I have a problem lol not managing my money properly the obvious right?? Now I need help with creating a budget what are your best tips/advice? I want to get this together this month so I can get started with my debt repayment plan. What are averages that should be spent in each category? Anything thing you can help with helps a great deal.
Thanks in advance!!!
How do I get started with creating a budget? Please help
June 7th, 2012 at 02:00 pm
June 7th, 2012 at 02:39 pm 1339079981
Next step is to figure out what you can cut so that you can stop going into debt, start paying off debt, and start putting money to savings.
How to keep yourself from overspending? One way is to handle your variable expenses with cash only; people sometimes divide up the money they've allotted into envelopes. Put the amount you're allowing at the beginning of the month into an envelope; when that envelope is empty, that kind of spending has to stop until the next month. I recommend a bit of spending money or "fun money," even if it's just $10 per person per week, just so you have a pressure valve to keep you from feeling totally deprived.
Another way is to keep all receipts and enter them into a spreadsheet or ledger so you can see how much you have left.
A good rule of thumb for how you want your income divided is 50/30/20: 50% going to needs, 30% going to wants, 20% going to savings or extra debt repay. Since I'm in quite a lot of debt and behind on retirement, I divide mine more like 50/25/25. Whatever works for you. But at least 20% of your income should go to savings or debt repay. At least 10% to retirement savings; the rest could be to build up an emergency fund or save for a new car.
This is just one school of thought. There are many other ways of thinking about money, and different people find different ones work for them. Good luck!
June 7th, 2012 at 03:24 pm 1339082678
June 7th, 2012 at 03:34 pm 1339083257
Another thing you might consider is if your bank has a budgeting tool on its website. I know both B of A and Wells Fargo have budgeting tools. Other banks may have them too.
June 7th, 2012 at 04:57 pm 1339088278
Realize it takes time to get a good, workable budget. You probably won't get it exactly right the first month, or even the second or third. But things should settle out eventually. You'll need to spend more time on it the first few months to really understand where your money is going and make adjustments as necessary. After a while though things will be more automatic and natural.
One thing that helped me tremendously was saving up one month's worth of expenses seperate from my emergency fund so that I could stop living paycheck to paycheck and not worry about bill due dates in relation to paycheck dates. That means that income I earn in June just sits in my account until July. On July 1 I have enough money to fully fund all my envelopes for that month. That means it no longer is a problem if the utility bill is due on the 10th but I don't get paid until the 15th. It also smooths out cash flow. If my paycheck doesn't get deposited on the day it is supposed to for example, no big deal. I have a month to deal with it.
June 8th, 2012 at 12:46 am 1339116383