Many people make the budgeting process entirely too complicated. Once you know the basics of starting and managing a budget there is nothing so complex that you should feel overwhelmed.
During my college years, when developing my first budget, I had no idea what to expect in terms of income and expenses. But soon enough the numbers started to fit better, I learned more about spending and saving, and my overall budget became a success. In other words, you have to get started at some point in time even if you don’t know exactly what you are doing.
The following budgeting tips and tricks are sure to help you out:
1. Don’t be scared. Believe it or not, many people don’t start a budget because they are afraid of what they will find. Sure, you may find you are spending more than you earn but isn’t it better to know? Remember, your problems are not going to get fixed by hiding from them.
2. Your first budget doesn’t have to be the end-all. Your budget can and will change on a regular basis. Anytime your income or expenses change so should your budget. This is why your first budget doesn’t have to be perfect. Sure, you want it to suit you well, but don’t get caught up in minor details.
3. Be accurate. When recording your income and expenses accuracy is more important than anything else. If you earn $5k/month but use $6k/month in your budget the end result is going to be off by $1k. As you can imagine this would throw your entire budget out of whack.
4. Don’t forget your family. If you are married you need to include your spouse when budgeting. Even if your spouse doesn’t contribute any income they still deserve to be involved. After all, it is important for everybody to be on the same page and working towards the same financial goals.
5. There is more than income and expenses. You should also have a column for savings. Just because you earn more than you spend does not mean you should waste the “leftover” money. Everybody needs to save, and this should be included in your budget.