by LAURA CLARK
So, the basics to budgeting go like this: know how much money you have, how you spend it, and what you need to spend it on. To help you onto the path of less money worry I give you this: a simple way to figure out a budget and how to keep track of what you spend! It really is as easy as that.
Step 1. Figure out your expenses
So, sit down, take a pen and list all your major expenses. Internet, car-rego, electricity, water, gas, food, rent, all those horrible things. Group them into groups if it makes it easier to handle. If you’ve got old bills, great! If not, just make an estimate and you can work it out as you go. Now, divide these costs into either weekly or fortnightly amounts, this’ll tell you how much money you need to set aside each fortnight to ensure you’re always on top of your expenses.
Now, preferably your income should cover these expenses, if not you might want consider setting aside what you can and covering some bills with savings.
Step 2. Setting up a spreadsheet
The key thing with a budget is you need to keep track of how much money you have in your spending account and how you are spending it. So, an easy way to do this is to set up a spreadsheet.
Create a column for each set of expenses, as well as a column for the date, a column for expenses and another for income, a grand total and a balance. The balance column shows the total in your account, minus the money allocated into each column. If you’re doing it right the balance should always be at $0.
Step 3. Keeping an accurate record
Now, there are two ways to go about this, and it really depends how on top of things you want to be. One way is to record every cent you spend and then update your spreadsheet with this information every day or two. This way you know exactly what you’re spending and your spreadsheet is always accurate. Alternatively, you might prefer to only record the expenses over ten dollars and accept that your budget will always be a touch inaccurate.
It’s really up to you, but remember that the success of a budget relies on you actually remembering it exists.
And there you have it, a simple guide to setting up a budget, like I said, pretty simple, pretty easy, no sweat!
Big tips for budgeting with or without a budget!
1. If you have a budget and it isn’t working, do it again. No one is saying that your first budget is going to be perfect; it’s a fluid process to allow for changes in your lifestyle or cash flow.
2. There are no hard and fast rules. What I’m suggesting is just a group of guidelines to help you manage your money, if you don’t like something I’ve suggested change it to something else!
3. Remember, setting up a budget and spreadsheet may seem stupid and time-consuming, but the time you spend now will prevent headaches in the future.
4. The little things might make you feel more in control, eg not buying that coffee/wine/yummy snack, but the reality is there’s not point sweating them. If you can get the big stuff under control, the little things will fall into place.
5. Important tip: always set aside money for casual spending and fripperies. It doesn’t have to be a lot, but enough that you know you can afford that book, or extra coffee or whatever. If you tie all of your money up in bills and groceries life’s no fun.