Budgeting Is Muy Importante!

I got this message from a reader:

Hello, Amy!  First off I wanted to thank you for your blog.  I read it everyday and love it!  I am one of those people who lack organization skills and really need some help on how to do a budget.  How do you do it?  Any help would be greatly appreciated!

Thanks!
Meagan

To be honest I used to be the world's worst at organization, however over the years I've become much better at it.  There are several ways for you to set up a budget.  You need to find the best way that works for you.  The first thing you need to do is sit down with a pen and a sheet of paper.  Gather up all of your bills and income sources.  Determine how much you make each month and write it down.  Add up all your monthly expenses.  There should be two categories - those that are fixed (the same amount each month) and those that tend to vary month by month.  You'll need to use the variable category to make adjustments - like the entertainment or gift expenses. 

Does your income exceed your expenses?  If it does, good! You're off to a good start.  If your expenses exceed your income you'll need adjust your variable expenses.  Cut down on the areas that aren't necessities.  Some ways to cut are eating at home more often or brewing your coffee at home in the mornings instead of stopping by Starbucks.  An excellent way to cut spending is couponing. :o)  The big aim is to have money left over at the end of the month.  You'll need to use this left over money to save for things like Christmas, unexpected expenses, retirement, repairs or in my case I'm saving for my new camera!

Make sure you keep track of where your money goes.  We use spreadsheets.  I use them for everything money-wise.  I have one for my home business, one for the money I make from Surveys, one for our monthly bills (like car payments and electricity) and one for how much I spend on groceries each month.  It makes it easier for me to just be able to pull it all up real quick if needed.  If you are not familiar with using spreadsheets you can go HERE for a tutorial on Excel.  There is also a website called Mint.com.  I personally have not tried this site, but have heart excellent things about it.

Some people don't like to use computers.  You could also do the envelope method.  Some people take out the cash and put the amount for each spending category in a labeled envelope.  There is also the gift card way.  Just find the way that works best for you.

Tips:
- Keep track of your daily spending.  Buy a small notepad and write down everything that you purchase in it.  We've all taken cash out of the ATM and wondered where in the world it went to.  This way you know exactly where it went and it will show you where you can cut spending.

- Don't forget things that come around once a year like taxes!  We tend to forget about them...

- Keep all of your receipts!  I can't tell you how important that is.  This is another way to look back and see exactly where your money is going.

Thanks, Meagan!  Hope this helps!