Click below for the free budget template that matches your lifestyle
Budgeting may not exactly be your favorite past-time, but it's a necessary part of life in order to ensure that your finances are kept in order. If you've never budgeted before, and have procrastinated up to this point because you're not sure how or where to start, the following 4 tips can help.
1. Keep Things Uncomplicated
You might hate math, which is huge reason why budgeting just hasn't made it to your to-do list. Although budgeting involves some level of mathematics, it doesn't necessarily mean that you need to be a calculus professor in order to maintain a proper, working budget. Start off using a simple formula - your take-home pay minus your expenses (including your mortgage/rent, car payments, utility bills, cable bills, and so forth).
The difference between the two is what you have leftover to spend on leisure expenses, such as dining out, going out to the movies, going on vacation, etc. If you get a negative number as a result, you know that you've got to cut back on certain expenses in order to keep the number in the positives. Once you've set this simple formula, you can break it down and elaborate on it as much as you want or need to.
2. Automatically Set Money Aside For Savings
Many people will come up with excuse after excuse as to why they didn't - or couldn't - put a certain amount of money aside each month into a savings account. Whether they just didn't have any money left over to do it, or simply 'forgot' to, many times the savings account is growing nothing but dust. Instead, set it and forget it. Have a portion of your pay check automatically deposited into an account that you don't have to touch. If your employer offers a retirement savings plan, take advantage of it, and contribute to it as much as you can, especially if they match a percentage of your contribution.
3. Pay Your Bills on Time, Every Time
Sounds easier said than done, right? Perhaps, but paying your bills in full and on time every single month will not only help you avoid those sky-high interest rates on outstanding debt, it will also help keep your credit score healthy. The lower your credit score, the harder it will be for you to get approved for loans, including mortgages, car loans, and so forth. Why waste money on late fees? An easy way to counter this is to set up your bill accounts on auto-pay so there's no need to remember when to make the payment, and for what bill. You may even consider trying out an account management tool that will remind you when you have a bill coming due soon.
4. Get an Accurate Idea of How Much You're Spending Every Month
Without actually adding up every cent you spend on a monthly basis, it's difficult to know exactly how much you're actually spending. While you may be able to quickly determine how much money you're bringing in every month, determining how much you spend is a much more detailed endeavor. A quick way to determine this number is to keep every receipt and bill you get, and plug those numbers into a simple budget template on a spreadsheet. This will help you visualize everything you're spending, and whether or not your income is able to cover it all.
Click here to download the XLS file simple budget template.xls.
The best - and easiest - way to keep your finances in order is to use a handy tool, like a simple budget template that can be found at Mint.com. This online service makes budgeting as simple as it can be. It essentially does all the organizing and sorting for you, then alerts you of the state of your finances. It doesn't get easier than that! Visit Mint.com and try our service for FREE!