Everyone Needs To Know How To Budget Money
Michalis 'BIG Mike' Kotzakolios
Defined Tag: How To Budget Money.
If you don't know how to budget money, you could be digging yourself into a financial hole. Budgeting money is a simple exercise that everyone needs to learn. Once you learn how money budgeting works, you will always have a good picture of your financial health. Otherwise, you may be going into debt and not realize it. To start making your money budget, get your checkbook, paycheck stubs, and any other bills you pay each month.
There are two general halves to creating a budget: expenses and income. Expenses include anything you pay to someone else for a product or service. These budget items can include rent, mortgage, utility bills, car payments, insurance, gasoline, groceries, and many other items. Make a list of expenses you pay regularly, and add them all. Use your checkbook register to help you remember.
Income is the part of your budget money that tells how much money is being earned. This can include your jobs, interest income, trust funds, alimony, child support, and other sources that pay you directly. Total all these incoming money streams. Now you have a basis on which to learn how to budget your money.
It is not difficult to learn how to budget your money. Compare your income to your expenses. If the income is larger, you are in good financial shape. If the expenses are larger, you need to learn how to better budget your money. But how do you do that?
To budget money, look at the size of a new expense. Add it to your existing expenses. If the new expenses are larger than your income, simply don't buy that new expense. If the new item is essential, look for expenses you can reduce or eliminate in order to make the new item not unbalance the budget. If the new item is non-essential, and you don't have money in the budget to pay for it, you have two choices. Don't buy it, or try to save more money each month until you can afford it.
Learning how to budget your money is not hard, but many people don't take the time to do it. They are therefore surprised when unexpected expenses come up that they can't pay. Learn how to budget money, and put some extra money aside each month for an emergency fund.