How to Budget

In order to help many people who might be wondering on how to go about the budgeting thing, a simple plan on how to make a workable budget is necessary. It should be noted that budgets vary and there are no two budgets that will be the same. This is because different people have different ways of spending their money making the expenses to be totally different. Generally a person can draw up his budget with these guidelines in mind.

  1. The first determinant of a budget is an income. The moment you are sure of how much money is coming in then you can go ahead and draw up a budget. Working with an income helps you not to over spend. People should always budget for money they are sure of getting and not what they hope to get as this may not be forthcoming.
  2. Identifying how you have been spending is also very important in budgeting as it will bring to your attention the areas that you have been using more money on. With a budget bad spending habits can be eliminated.
  3. Adding up the expenses and subtracting them from the income is a very important guideline as it will reveal the excess you are having or whether you are living beyond your means. With this picture clear in your mind, you are able to make a decision on where to put your money and where not to spend at all.

People should be aware of the fact that a budget keeps on changing and there is no perfect budget. It keeps changing depending on the needs and the income. When the needs are many it goes up and when they are few you spend less. You need to keep trying for you to come up with one that works for you so that you can adjust where necessary.

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