Making a Budget for the First Time? Read This

If you're somewhat embarrassed that you don't have a household budget, you shouldn't be. Most people realize that making a budget is perhaps the most important key to financial security, yet a 2013 Gallup poll showed that only 32% of Americans have a household budget.

The truth is, everyone, from the kid making the most of her allowance to the well-paid middle-aged executive needs to have a budget to make the most of their money. But actually making a budget is all too easy to put off.

It's Never Too Early or Too Late

Don't think that because you're a teenager working part time for spending money that there's no need for you to have a budget. Likewise, if you're 60 and wondering if you'll ever be able to retire, don't think it's too late to have a budget that will do any good. It's never too early or too late to take control of your finances.

A Budget Is Not a Straightjacket

Many people put off making a budget because they think of a budget as an absolutely rigid plan that dictates where every last penny goes, and if you make a mistake you've blown it. In truth, a workable budget is a household spending plan, and plans are always subject to modification based on reality.

Making a budget won't take all the fun out of your life. On the contrary, making a budget and sticking with it is one of the best ways to make sure you can do all the things you want to do with your life. When you know where your money comes from and where it goes, you make better financial decisions, on big things and little things.

Start now: Sign up for Mint and make a basic budget in about 10 minutes.

It Doesn't Have to Be Overwhelming

Making a budget for yourself or your household doesn't require the kinds of monetary acrobatics Congress goes through trying to make a budget. Sure, making a budget requires effort because anything worthwhile does, but with the great tools available to you today, the process does not have to be overwhelming. When you think about it, it's far more overwhelming long term to be constantly wondering if you have too much debt or if your income will cover your bills. Making a budget lays it all out there for you, so that whatever choices you make with your money are informed choices.

The Four Pillars of Your Budget

There are four basic components that go into making a budget:

  • How much you have
  • How much you make
  • How much you owe
  • How much you spend

Knowing these four things and tracking them can change your life for the better, starting from day one. The best budgeting tools help you gather, organize, and track all four of these components, as well as flesh out details that may be important to you short term (like saving up for new tires to replace your worn ones) and long term (like making sure your retirement is as comfortable as possible).

Online Tools Can Help Tremendously

Mint is an online budget tool that's free and remarkably simple to use. Once you sign up, Mint can gather your account information for bank accounts, credit card accounts, loans, and investment accounts and put them all in one place so any time you want you can see where you stand financially.

Mint also helps you create a budget with all the basic budget line items like groceries, utilities, insurance, and other expenses. When making a budget you also want to include specific line items. For example, you may want to create a line item to set aside a certain amount every month to go toward a family vacation. Mint lets you do this easily, and also lets you set financial goals, like saving up for the down payment on a house, and track progress toward them.

Don't Leave Your Budget at Home

It's great to have a budget at home on your computer, but what about when you're out actually spending your money? Mint offers free mobile apps that let you take your budget with you anywhere. You can see instantly whether you'll bounce a check, or whether your credit card is near its limit and can make informed decisions with your money whatever you're doing.

Making a budget is one of the smartest life choices you can make, and Mint makes it as simple as possible. You can start today and bring yourself one step closer to the financial knowledge and control that will make your life better.

Start now: Sign up for Mint and make a basic budget in about 10 minutes.