Some Tips On How To Make Budgeting Easier

Posted on Apr 30, 2014 | 0 comments

Entering the world can be a very daunting experience for any person who has just left home; and one of the most terrifying factors are the financial responsibilities. No longer will Mommy or Daddy take care of the bills; instead, you are in charge of paying everything from rent to unforeseen household expenses. One method of staying on top of all monetary obligations is by setting up and using a budget.

Budgeting is simple enough, once you get the hang of it; but for the beginner it can seem rather overwhelming. Below are four basic tips that will clear the fog on budgeting and make this concept much easier to manage:

1. Start recording all your expenditure

This basically means that you need to start tracking all the money you spend and what you spend it on. It is essential as this will determine whether you are spending money on and which items are ‘eating up’ the majority of your pay check. If you are experience a lack of funds at the end of each month, this is an ideal way of identifying ways to shuffle your money and even save some pennies.

Tracking expenses requires a bank statement and computer/smart phone/pen and paper. You must place the different amounts spent under different headings (rent, food, telephone) to identify how much money was spent on which item throughout a period of one month. The sooner you do this, the better.

2. Set up direct debits

Setting up direct debits or automating payments is an ideal way of paying those mandatory monthly expenses, e.g. rent. This makes sure you don’t miss a payment. Furthermore, it helps you budget an expenditure of a particular amount each month showing you what potential amount you will be left with after these expenses are paid. Remember a budget is what will be received and not net amounts.

3. Prioritize

Make budgeting a priority. Once you decide to budget, stick to it and it will soon become part of your monthly routine. Managing your finances is an important part of living on your own and by having control of your money you will find yourself in a better financial situation at the end of the month. You may even save some money.

4. Get started

The most difficult part of budgeting is beginning. As was mentioned, budgeting can be very overwhelming; particularly if you have never dealt with financial statements before. However, with practice and determination budgeting can help you be more successful in managing your financial obligations.

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