Budgets; the one thing that we keep on making only never to meet. There are indeed people who live strictly within their budgets, and then there are others whose budget only remains on papers. Making a budget is easy, but seeing it through is a different story altogether. The budget requires a particular discipline that’s not easy to instill. Before making a budget, one that will work this time, you need to understand your relationship with money. Unless you change your mindset, you will always have issues with maintaining your budget.
Other than that, the following tips will help you put yourself on a budget;
Start by making a note of every dollar going out
Keep a record of every dollar you spend. The biggest issue with most people is an excessive expenditure, one that they can’t manage. So, to help you this time, track every dollar that leaves your wallet. You can start by monitoring the next 21 days where you follow every dollar you have spent. Cut off everything that does not have much value in your life. Avoid living beyond your means.
Divide expenses into mandatory and discretionary
Since expenditure is the biggest issue, we will spend more time expounding it. Make a list of all the things you want, and you need to have. Make sure your list is exhaustive and includes anything and everything. Once you have a list, divide your list into mandatory and discretionary with the necessary being things you can’t live without, such as food and rent. On the other hand, your discretionary items are the things you can do away with. It could be drinking with friends every Friday or going to the movies.
Subtract your expenses from your income and see how much you need to cut back
Once you have done all this, you need to subtract your expenses from your income. If you see you are spending more than you earn, you need to cut off somethings. Ideally, you need to spend less than you earn and save the rest. If you are spending more than you should, it is time to cut back on some of your expenses.
Cut discretionary expenses to fit your salary
Once you establish there is an apparent disparity, it is time to do away with some of the items. The items that need to be cut off should come from the discretionary list first. These are the items that you can live without, such as drinks and nights out. Though this does not mean that you are anti-social or distant. You are merely doing what is best for you.
Create an itemized budget and keep track every month
Finally, it is time to have an itemized budget, one that features the things that matter. Now that you have cut off most of the unneeded elements, you can plan and act accordingly. Avoid unspecified stuff on your budget and any grey areas. Every item in your budget should have a specific purpose and never have things listed in general. Once you have done this, the only thing that is remaining is to have keep track of the budget monthly. On your payday or a day earlier, review last month’s budget and plan for the coming month.