1, 2, 3, 4. Create Four Steps to Budget More

The new year is a time to make a fresh start in your life, to wash away the mistakes made the previous year. It a period where you stop lingering over the bad decisions you made in the previous 12 months and start thinking about all the positive decisions you will make in the next twelve. In the world of home finance, this means forgetting all the stuff which hurt you in the previous year and begin with a clean slate. It’s time to make some steps in the right direction.

For many, this means the creation of a household budget. Some people who read this have had a budget in the past but gave up on it. Others who peruse this blog have never considered creating a budget, thinking it’s only for businesses and their parents. Here’s the thing: a budget is not something which should hinder you. If anything, a budget is a tool to see where you are financially and where you’re about to go.

Some of you are rolling your eyes while reading this, which make it hard to find you place. Others are mumbling that budget creation is too hard. Actually, creating a budget is as simple as counting to four on your fingers and toes. Here are the top four things you need in order to create a budget.

1. A place to store the budget.

It doesn’t matter if it’s a piece of white paper, a ledger page, an computer-based spreadsheet, or a program like Quicken, you need a location where to place your numbers and record additions and reductions of funds via numerous transactions. What you use depends on the type of person you are. Some people are fine utilizing a ledger book while many others use a software package to help maintain the calculations.

2. Categories.

Income and expenses. Technically, these are the only two categories you would need in your budget. However, should you want to see how much you spend on groceries, utilities, and the like, it’s probably best to separate those two categories out into sub-categories. This allows you to populate down to the smallest increment in order to keep a regular check on the money that comes in and goes out.

3. Time.

You need to make time in your schedule in order to work on the budget. It doesn’t have to be something you allocate time for every day, unless you want to keep close track of your money. Instead, consider putting aside a few minutes every few days to record expenses and get ready for the next pay. Save an hour of time each time you get paid.

4. Patience.

You’re not going to solve your financial problems in one day, let alone one week. Maintaining the budget will help you get the ball rolling toward financial independence. You just need to hold on for a bit to make it happen.



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