Budgeting

Now to budgeting........

Everyone is always wondering how they can make money right? Well how about saving money! If you save money, you will have more money than you would've if you didn't save that cash.  Makes sense.  So anyone who really wants to make more money, will always look at ways they can save money.

• The first step is to Create a new budget every time you get money.  For most people who receive a paycheck from their job, this is once every 2 weeks.  Others, if you don't have a steady job and are just making money when you make it, say with the great creative ideas on this blog ;), then it will be more sporadic and infrequent. Either way, whether it's a regular or irregular interval, the best time to decide how you're going to spend your money is when you get it. Make it a rule that you don't spend any of your paycheck money until you've worked out your budget.

•  Make a list of the necessities to pay for until the next paycheck, such as:
  
  
• Rent/mortgage
• Utilities
• Vehicle payments, insurance, maintenance (e.g. oil changes, tire rotations)
• Debt (credit card payments, student loans, doctor's bills)
• Gas
• Tuition, school supplies
• Food/groceries
• Health insurance
• Savings per paycheck! (Suggested amount is 20%-30% of each paycheck or payment put directly into your savings before you ever think about using for anything other than the necessities)

•  After you make a list of the items you need to pay for, create a chart with how much (or estimate) of how much they will cost. A great way to do this is in Microsoft Excel. For example, you groceries/food should be about the same amount each month, but for gas, you may drive a little more from one month to the next so always set an estimate higher than you think the actual cost will be, that way you will have extra spending money if you don't use it all.
• If you are in high school you probably don't need to worry about MOST of this, but college students and older will.
• If you make money sporadically instead of by paychecks, my suggestion is to always put away 20% right away without even thinking about it. You can put more in your savings later but this will be a fixed amount that you will always contribute before anything else.

•  Add up all of the amounts (necessities) and subtract it from your paycheck/payment amount. If you get a negative number, you have to cut some costs, find a way to live for cheaper.  If you have a positive number (which you should) this is your excess money that is up to you to decide how to spend it.  There are a few categories I would suggest using the excess money for:
  
  
• Flex money. This should be about 10-20% of your regular expenses. It's for if something you need to pay for turns out to be slightly more expensive than you anticipated. Such as the gas example previously stated in the blog, or if your laptop breaks and you need a new one to work, etc.

• Savings. Ideally, about 20%-30% of your paycheck/payment should go into your savings, but even if you are on a meager budget, 10% (if you do it consistently) is pretty good. Build up your savings account for emergencies, unexpected payments, investments, and your future. You should always have at least 5-6 times your regular expenses in your savings so you can deal with anything that comes your way, such as if you lose your job.  NEVER let your savings go below that amount.  After you reach that amount, keep saving for your future and investments.

• Spending money. This is your leftover after you subtract flex money and savings money and necessities. Everyone needs relaxing time and de-stress time.  Use this money for what you enjoy: things like clothes, eating out, movies, gifts, and anything fun. "If you start to cry when you realize how little fun money you have, then you need learn How to Reduce Your Expenses."

• Keep everything except your spending money out of reach! This will make sure you don't touch it and it is there when you need it. The best way to do this is just to keep it in the bank and keep your spending money in cash or a seperate account.

Good luck!