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How to Budget Your Money Wisely

By Edited May 13, 2015 0 0

Budgeting your money is very important with today's economy. Budgeting your money will help you pay of debts, save money and be able to spend more money on the things that you want. This article will teach you how to budget your money wisely.

Things You Will Need

pen

paper

financial information

Step 1

Start out by gathering all the information that you will need to budget your money. You will need to make sure that you have information for all of your income, monthly bills and any other expenses. You can estimate other expenses like gas for your car, groceries, etc. Once you have all of this information in front of you it will be much easier for you to budget your money.

Step 2

Now take a pen and paper or open a spreadsheet on your computer. At the top of the paper, put your total monthly income. This will show you how much money you make so that once everything is put on paper, you will be able to see where your money should go. Now under your monthly income, list all of your monthly expenses. Make a section for bills and a section for estimated monthly expenses like gas, groceries, etc. Estimate higher than average for these monthly expenses so that you can make sure that you will have enough money for your budget.

Step 3

List all of the amounts for each bill and expense on the paper and subtract that number from your total monthly income. This is the amount of money you should have each month after you have paid all of your bills and have taken care of all other expenses. This number will fluxuate based on the estimated monthly expenses. Having a list of all of your monthly expenses and your total monthly income on paper right in front of you will help you get an overall view of your budget.

Step 4

Grab a few envelopes and write down the name of a bill or expense on each one. Keep all of these envelopes somewhere hidden so that nobody can access them. Each month, put the amount that you will need to set back for each bill or expense in the envelope. Now every time you go to pay a bill, get gas for your car, get groceries, etc, go to that envelope and only use the money inside for that particular expense. Make sure that you do not borrow money from other envelopes for these expenses or your budget will be offset.

Step 5

Make an extra envelope for entertainment. If you are in good standing and make enough money then you should have a little bit of extra money each time you get paid for entertainment. Place a certain amount of money in this envelope for things like going out to eat or going to the movies. If you are paid bi-weekly or monthly then you might want to make 2 or 4 envelopes for this so that you can seperate it by week. This way you will not spend all of your entertainment money as soon as you get paid. Stick to your budget and do not waste money on things that you do not need and do not dip into other funds for things like entertainment. As long as you are disciplined with your money, you should come out ahead and be able to put some money back to save.

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Tips & Warnings

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