6 Easy Steps to Create a Monthly Budget From Scratch.

Personal finance is something that we are ALL required to undertake, albeit kicking and screaming.  But of all things involved in managing our money, one of THE most important things is the budget.  Setting up a budget sends many folks' brain into a tail spin, and gives the feeling of something to be avoided, along the lines of a root canal.  But it doesn't have to be that way anymore.  Follow these steps to conquer the budget blues.  Oh, and expenses and bill balances change from month to month (ie. your electricity bill), so the budget should be done every month. 

1.  Make a list of all expenses, monthly bills, and their due dates.  This only has to be done once, unless there is a new bill added or removed.  You may alphabetize these, categorize them, or oder them by due date, that option is yours.

2.  Know your paycheck amount and how often you are paid.  Most people have an idea of what this is, obviously.

3.  Start a new sheet of paper, and put your monthly income amount at the top of the page.  This is your starting point.  This is what you have to spend for the coming month.  If your paycheck varies from month to month, then estimate what you are anticipating your income for that month to be. 

4.  List all expenses on the left, and their amounts directly under income amount.   Using the method of listing you decided on as discussed in Step 1.

5.  Start subtracting. Using a calculator or a pencil and separate piece of paper, subtract expenses from income, going down your list.

6.  Did you reach zero?  The main goal is to reach 0 at the bottom of the page, after subtracting all expenses from your income.  If you have money left over, do something with it, allocate it somewhere, anywhere, just be sure it has a place. 

You have now created a monthly budget!  Once you do it a few times, you'll realize most of the bills don't change, so you can use your monthly budget template over and over again with only a few modifications. 

Once you get the hang of doing the monthly budget, you'll find online tools to make it even easier, like making a spreadsheet in Google docs.

With control over where and how your money is used, you are on the road to financial success!