4 Easy Steps on How to Budget


More often than not, we are tempted to spend more than what we earn, which is a sure recipe for disaster. Budgeting is the best way to keep ourselves from being buried in debts. By doing so, it requires a fair amount of discipline and commitment until making a budget plan and sticking to it becomes second nature to us.



1. Record all expenses. It is very important to keep track of where our money goes. List all your expenses every month. You can create a separate list for the fixed monthly payment like student loans, insurance payment, rent or mortgage and a separate one for groceries and bills. Include in the list the amount you pay every time you eat out, gas or travel expenses, and even down to the smallest penny you get to spend.



2. Make a budget. After tracking all your expenses, you can now start to make a budget for your monthly payments. Record your source(s) of income and from their set aside payments of all your activities. Make sure to pay your debts and bills first before setting aside expenses for groceries and other things. Budgeting is not easy but it’s one of the biggest elements on how we can manage and organize our finances well.



3. Save. After making your budget and you still have something left, don’t forget to save. Don’t rush into the mall and buy stuff you don’t need. Invest for your future. We don’t have any idea of what comes next, it’s better to be prepared and in case of emergencies we won’t find ourselves deep in debts.



4. Repeat steps 1-3 for the next months. Sticking to your budget needs a lot of discipline and control. Don’t be discouraged if you could not stick to it the first time. Learn to be patient with yourself and continuously apply these three steps. You’ll get better in budgeting as time goes by.

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