Do you feel that your expenses out balance your income? It seems that there are just tons of bills that are lining up to be paid and the moment you finish paying up the bill on hand another bill arrive in your mail waiting for you to spare your hard earn money to pay up for it.
Guess what, it does not only happen to you. It happens to every household around the globe. There are always the over spending of electricity and water bills. Never ending tuition fees to pay for your kids’ education, the endless car and house loans; sometimes, you are just amaze at how you cope with all these bills and pray that time would just stop.
Most households resolve to credit cards, some would borrow money from illegal parties and would end up in an even bad situation of debts than before due to high return interest rate. There is only one answer for this problem. The answer is budgeting! Study your household cash flow and learn to adjust your spending habit to cope with the monthly bills and to avoid falling into debts. Create a budget account where the spending and income matches each other.
Here are some steps to help you in having a budget that would work out.
- Known your income. How much do you received each month. Add up the total of you income for the past 3 months and divide it by 3 to known your net income each month. This will help you understand the total amount of income you are can spend.
- Have a list of the things you need to spend on. Once the list is done, go through it again and strike off items that are not important or necessary. Things that are supposed to be on the list are rents or mortgage for your car, house, utilities and other items that you think are needs and not wants.
- Gather, if possible all of expenses bills and receipts for the past 3 months and count your monthly spending for the items that are listed on your list. Add the amount of spending in each item for the past 3 months and divide it by 3. Do this for all the items in your list.
- Once you have calculate your average spending on each item, total up the amount for each item and subtract it from your monthly income you have calculate earlier.
- Here comes the best part, with the balance of the money left from your income after subtracting from your list items. Plan on how you would want to spend the remaining money (spending money) for things to help you relax and entertain like movies, meals, gifts or maybe donations.
- As each month past, track you are spending and adjust your spending money for each items listed on your list.
- Lastly, be discipline and follow your budget. No budget would work out without properly follow up actions. Ask your friends to remind you if you are spending too much on your spending money.