Guidelines of a Budget. There are a few basic steps of making a budget and a couple of intermediate ones. For anything more complicated I suggest finding an accountant as I do not know the basics.
Step 1: Make a list of all your bills.
Do you have credit card bills, house payment or rent, car payment, car insurance, cell phone and house phone bills? How much gas do you use in a month? How much do you spend on food at the grocery store, at a restaurant, in fast food? Do you pay for internet or a gaming site? List anything and everything that you pay for every month. This is your monthly bills.
Step 2: Make a list of all your income.
How much money do you bring in a month? Do you have a job, food stamps? Make a list of every way you get money on a monthly basis. If it doesn’t come in every month, don’t list it.
Step 3: Retirement/Saving.
In the 1st step, you listed down all your outgoing expenses. When you made your list, did you think about your savings account and retirement? Even if you are 18 years old, it is never too early to think about your retirement plans. Saving just ten percent of your paycheck can mean that you can retire on time and without having to have supplement income (another job). Also, in the immediate future, what happens if your car breaks down, do you have enough money to fix it?
Step 4: Anything Else.
Have you ever thought about a new hobby? Have you ever thought about going for a movie night? There are many things we love to do every month which adds up our budget. You can only afford a few of them. You can choose which you need most.
Step 5: Mathematics (Adding and Subtracting Only).
After you get all the savings, expenses and income figures out you need to do the mathematics. You should add anything that is income and add all your spending which may include your retirement and savings. This will give you a balance.
So, it’s that simple. You just need to add up expenses, which includes retirement, savings and fun fund. Subtract that amount from all that you earn per month. When you get a positive number you should have fun, if you get a negative number you should reduce your expenses.