When you’re sitting down to write your budget, there are two essential ingredients that you must keep in mind. Just like when you’re baking cookies, if you don’t get the ingredients just right, your result will be undercooked and quite disgusting.
So what are these essential budgeting ingredients? They’re easy. You’ve heard of them before. But as a refresher, here they are in full force:
1. Your Income!
That’s right, your income! This is perhaps the most important ingredient of all. A budget doesn’t even exist without your income, and you couldn’t spend money without it.
If your income is lacking, try taking up an extra job such as mowing lawns, pulling weeds, babysitting, or anything else you are good at!
2. Your Expenses!
You could make a million dollars a year and still be broke. Why? It’s because you spent it all on frivolous things! Your expenses really do matter, and when you consider them in conjunction with your income, you’ll be on the road to a better financial future.
If your expenses are severely out of control, make a list of all the things you spend money on in a month’s time. What are some of the highest expenses that you can find? Do you really need those expenses in your life? How about some of the lower cost things? Could it be that those coffees you get every morning at Starbucks are weighing you down?
Whatever is unnecessary or extravagant - cut those things from your life. Remember, when you are on a tight budget, you shouldn’t be able to go out to eat every evening - or every other evening for that matter?
Discover a brand new budget.
If you struggle keeping up with a budget, you’re going to have to rethink the way you handle all of your finances. Learn how to create a budget. You’ll be so glad you did. Don’t make it complex to the point that there is no way for you to follow it. Keep your budget as concise as possible. However, make sure you don’t dumb it down to the point where you are mixing essential budgeting categories. For example, do not mix your food category with your fun money category! These should be separate categories in your budget.
Once you’ve developed your new budget, stick with it! It’ll be painful at first, and you’ll find yourself having to rewrite your budget every few days, but after awhile you’ll get the hang of it! Now go make a budget!