Budgeting takes a concerted effort. It's quite likely that the first time you sit down and attempt to put one together it will take a few hours, but that's just the learning curve everyone is subject to. Once you've accounted for everything and gotten your system established, it'll be much easier to make any adjustments - whether they're tweaks or wholesale changes - should you need to down the line. And, here's a hint for you: you will need to. But don't worry; it's absolutely, positively normal. Listed below are a few tips for building your budget.
  • Account for every penny of your income. Include all of the regular monthly jobs that you receive a paycheck for. For multi-income families, even if more of your income goes to pay the bills than your spouses', include all incomes coming into the household. If you're a single parent receiving alimony or child support payments from a former spouse, be sure to also include this amount as a part of your regular monthly earnings.
  • Now that you know exactly what you've got coming in, it's time to focus on what's going out. What are your expenses? The usual ones include rent or mortgage, a car payment, utilities, insurance and credit cards. Of course, there are probably a number of other expenses that you can think of. Include each and every one that pertains to you and your household.
  • Your budget is now beginning to take shape. When you add up the expenses and subtract them from your earnings, you'll be looking at either a positive or negative number at the bottom of the equation. A positive number is good. It doesn't automatically mean that you don't need a budget, but it's a clear sign that you're already pointed in the right direction. A negative number, on the other hand, means that you're living beyond your means, and you're going to have to find ways to cut spending and/or bring more money into the house.
  • Take a close look at your credit card bills. Carrying a balance from month to month can be a very costly thing to do. If you're using your credit cards to pay for necessary items like groceries, car repairs or unexpected bills, you might consider adding an "emergency savings fund" category to your budget. The money you put here must be earmarked for use only in emergencies, and will help to keep your budget from unraveling should any such unforeseen circumstances arise.
  • Once all of the numbers are plugged in and you've set up spending limits for categories, it's time to put your budget in place. Here's an effective little trick: if you need to, withdraw cash from your bank account(s) and put it into separate envelopes that represent each category of your budget. When the money in an envelope is gone, so is the monthly spending for that category.

Remember, budgets are not set in stone. As you proceed from month to month, review your budget to determine if any spending-limit changes are needed. Even if you can only set aside five or ten dollars each month in the beginning, that's okay. After all, it's more than you had thirty days ago, right? Success often comes in small steps; just stick to it and don't give up.

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