Creating a budget is as easy as creating an itemized summary of your income and expenditures then planning accordingly for the future. In recent years the word budget has gained a negative connotation engendering thoughts of restriction like a diet for money. A real budget should mean more prudent spending, it should show you how much money you expect to earn VS what you spend from the available reserves. You should view your budget as a tool for achieving financial success.
## Budget Basics
*Detail* is a budget's best friend, so gather all accessible relevant financial information and sift through it. This analysis is a big step budget-making process, it helps you create a monthly average balance sheet which is the foundation of the budget. This means all of your sources of income must be added including self-employment or freelance work. Next, you’ll need to list your monthly expenses. This will be a list of all your expected expenditures over the course of one month.
A good idea is to make expenses two categories: **1st** is your Fixed expenses which stay relatively the same month and are pertinent to your way of living. These are expenses such as rent, utilities, credit cards etc. **2nd**, you have your variable expenses that change month to month; This will be where you can make the most adjustments. After you have become familiar with it, you can add up your monthly income and monthly expenses. If your calculations show higher expenses than income, you can adjust the Variable expenses to compensate. If you have Excess income instead then you can designate these funds to be used to add areas to your budget such as retirement/investments or paying off credit card debt faster.
Your main goal should be to balance your income and expense columns. You can do this by making sure all of your income is allotted to a budgeted expense or savings goal. This includes creating emergency funds and nest eggs.
To keep a solid account it is good to review your budget at least once a month. reviewing your budget regularly ensures you are on track and can catch any problems as they arise. Every month you should at least take note of the change in your available capital. This will illustrate the growth or decline of your balance sheet and could indicate the need for a change in strategy.
Getting your budget in order is an easy task that may take a little time but after you are acquainted with your expenses you will be able to better save money.
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