4 Budgeting Basics for Beginners

Budgeting is something most of us like to put off for the longest time. We assume it isn’t important till we have a student loan, a mortgage debt or credit card debts looming over us. However, emergencies, major life changes and lifestyle demands deem it necessary we look into our finances and Budget. 
Here’s a quick 4 step guide for all you budgeting beginners. Don’t worry! it isn’t as bad as most of us make it out to be.

Compare income and monthly bills

The first step to budgeting is the bigger figures. Tracking all your big and small spends in the week will only make you want to tear your hair. Start with taking into account your whole monthly income and subtract fixed monthly expenses like the electricity bill, rent etc. the stuff you know you will invariably spend out of your income. This is the base amount for your budget.

Weigh in your spending cash

The difference between your income and base expenses is your spending cash. What you decide to do with this money will define your spending habits. It is crucial that you separate impulsive purchases from important ones like grocery shopping and home supplies. Factor in the things you may splurge on and ensure it is a lot lesser than the actual necessities.

Make saving a priority over spending 

 

It is easy to feel like more credit accounts won’t hurt and assume you’ll make payments effortlessly in the near future. A big part of budgeting is cutting down piled up debt. In the beginning it may feel like you’re doing away with too much handy cash. But, your savings will erase debt and in the long run you will have less to put away in the debt fund and more for your personal expenditure. 

 

 

Plan your month

 

This is the part everyone hates the most. However, you will be surprised how satisfying it is to find you have more room in your personal budget for things you’ve wanted to invest in. Once you are done with figuring out how much cash belongs where, pen it down. If excel sheets aren’t looking very friendly, get yourself an app that lets you prepare a budget, but make sure you chalk it down somewhere. This will keep you organized and give you a clear picture of your budget. 
Following a personal budget may feel a little restrictive in the beginning. Cut yourself some slack and know that you won’t be a wiz at it right off the bat. Take baby steps and let your budget do the saving for you.