Tuesday, April 5, 2016, AM | Leave Comment
For some people, creating a budget does not sound fun AT ALL! But once you realize just how much fun you can have in the long run by doing so, creating a budget won’t seem so tedious at all.
Here are the steps that you will need to take to get on the right foot with budgeting:
Use Excel to List Your Fixed Income/Expenses
The first thing that you will want to do is to open up an Excel worksheet and start by listing down all of your fixed income sources.
This could include your full-time job, part time work, and any other sources of income (i.e. annuities, perpetual gift streams, etc.).
Divide whatever your income is so that you can see it from a weekly standpoint. So, if you are paid bi-weekly, divide your pay by 2. If monthly, divide by four.
Once you have this completed, list all of your expenses according to how much you pay for them on a weekly basis. These could be things like a mortgage, car payment, cell phone bill, eating out, groceries, gym membership, or anything else. Also, create a miscellaneous category for anything else you may have missed.
Next, figure out exactly how much you have left each week. Do this by subtracting the weekly expenses from your weekly incomes. Take whatever amount you have left over and funnel it into paying off debt (first), saving up six months to one year’s salary in a savings account (second), and investing in a group like Acorns.
They are an SIPC insured broker-dealer that lets you invest spare change and then they do all of the hard work of picking good investments for you.
A large part of the budgeting process is figuring out what expenses you can reduce or cut now in order to have more fun down the road. I like to think of saving and investing as paying myself. Since I like myself so much, I don’t mind paying myself for a better future, and you shouldn’t either.
If you have something that you need to buy (i.e. cell phone, car, living space, etc.), look for better ways to get quality for a cheaper price. If you need to purchase a car as a replacement for one that got old or broke down, perhaps try looking for cheaper alternatives to buying a new car.
Professionals, like those at Jack Buford Chevrolet, know that buying a used, solidly-functioning vehicle that gets you from point A to point B is all you really need. It doesn’t have to have all the pretty bells and whistles so long as it gets the job done.
Budgeting is the key to obtaining financial freedom. The sooner that you take charge of your finances, the sooner you become free. Don’t you want to be free sooner rather than later? Then get to work on budgeting your money efficiently.
Rachelle Wilber is a freelance writer living in the San Diego, California area. She graduated from San Diego State University with her Bachelor’s Degree in Journalism and Media Studies. She tries to find an interest in all topics and themes, which prompts her writing. When she isn’t on her porch writing in the sun, you can find her shopping, at the beach, or at the gym. Follow her on twitter and Facebook.