I am going to explain how to make a budget. There are so many people in debt. I want to do my best to help. The first few times you try to do this budget it will feel awkward but after awhile you will get the hang of it. If you are overdrawing your account every month, taking out multiple payday loans, and getting deeper into debt, then something seriously needs to change. You will need to make some drastic changes in your life, but if you stick with it I promise you will end up being happier. Here is an example of what a budget sheet should look like. Then I will explain what should go on the budget sheet and how to figure out what your expenses are and how to manage them.
You need to figure out your overall income
Knowing how much you have coming in will help you to determine what’s going out. Here are some things you should figure out before you start your budget.
Do you get a fixed income?
A fixed income is where you get a set amount of money from each pay check.
Do you get a salary income?
A salary income is where you get a different amount of money each time. If you have an idea of what you make, it should give you an idea of what should go out.
You need to figure out what you are getting before you do your taxes, and what you have left over. The way to figure out what you have left over is to subtract what your taxes are from your income and what you have left over is what you have to live off of.
Figure out what you are spending each month
Write down everything you spend for a month and what your monthly bills are, how much you go shopping, go out to eat, going out with friends, tithes, etc. If you figure out how much you are spending, it will give you a better way to keep track of it and will help you to make your budget more manageable. Here’s a way to help you figure it out.
Write down everything you are spending into categories:
It will make it easier to figure out and then you can decide where to make adjustments. Here is a list I try to go by:
Tithes: They should be 10% of your income.
Charities: You should spend between 5-10% if possible. If not, pick one charity you can afford and focus on that one until you can afford to do more. Please do extensive research to make sure the charity you’re supporting is legitimate and gives the majority of the money, if not all of it, towards what the charity is about.
Rent: This should be no higher than 30% of your income.
Vehicle: You should spend no more than 10% of your income.
Groceries/Going Out To Eat: You should always make a grocery list so you don’t overspend. Don’t go out to eat very often because it can get very expensive very fast. You should only spend 9% to 12% on groceries. Some people spend $300 or more every month on fast food but if you really want to save money you should only go out to eat once a week. You should try to only spend at the most $100 a month on fast food if possible.
Utilities: For Utilities you should only spend 10% of your income. This includes water, gas, and electricity.
Health and Fitness: For both of these you should only spend about 20% of your income. This includes doctors, medications, going to the gym, etc. If you eat healthy and exercise regularly this can be attained.
Debt and Miscellaneous: These should be no more than 15% of your income. These include loans, monthly allowance, clothes, phone, and gas. Any other miscellaneous items like music, books, entertainment, going out, etc, gets taken out of your monthly allowance.
Savings: You should put between 5% to 10% of your income into savings. You should always try to keep 3 to 6 months of your total income in savings at all times if possible. Example: I get $877 a month. So I should have at least $5,262 in savings at all times and keep building it up.
You should never touch your savings if you don’t have to. Only use it in emergencies. You should try to forget it’s there.
Some months will be harder than others and you will need to decide what are the most important things to pay and where to cut back, but for the most part, this is doable.
Now I am going to tell you how to get away from the payday loans;
Pay one payday loan off every month and live off of the rest until they’re all paid off. Things will be tight and you will have to cut back on things. If you can be persistent and get through it, I promise you will be happier and a lot better off. Please, once you get all of the payday loans paid off, don’t go back to them. It will cause you to get back into debt and will take you a very long time to get back out of it.
This form is a great way to budget. You will get your bills paid off a little at a time, and you will be building up your credit by not acquiring more debt.
I will be working on more articles on how to get out of debt and save money. I hope this will be helpful.
Researched on Wikipedia.