One of the things that I am really working on in my life is creating a budget that will work for me. I don't currently have a budget, which is a big mistake in my life! I track my money, but I know if I had a budget then I would most likely be doing a lot better with my money. Luckily I have my sister to help me out a lot.[no_toc]
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Figure out how much you mak
This probably sounds easy, but a lot of people calculate how much money they make wrong. If you make a set salary every year and are paid every 2 weeks, then if you calculate how much money you make by dividing it by 12 months, it'll be more than what it should actually be. That is because some months are 3 paycheck months. Make sure you are calculating your monthly pay correctly! Also, try to be realistic – don't include bonuses which might not even be given.
And don't forget about taxes! If you've never really worked full-time before, then you will probably be shocked by how much is taken out of your paycheck every pay period.
Figure out how much you SPEND
Gather all of your bills: health insurance, car insurance, housing payment (rent, mortgage, etc.), gas, food, and so on. Some expenses will be fixed and some expenses will be variable. Try to estimate the variable expenses the best that you can, all while being realistic with this.
Don't forget about savings!
When you are figuring out how much you are spending, don't forget about saving for things as well. Save for retirement, travel (if you want to travel that is), a wedding, and anything else. Of course, different people will have different things that they want to save for! If you have a hard time saving because you spend your money too quickly, try to “pay yourself first” by putting money into your savings accounts FIRST, instead of after you have already paid for everything. Working with less money every month tends to make people think harder about how they will spend their money.
Analyze your budget monthly or some determined set time period
Since many expenses vary every month, you should try to analyze your budget every month. With analyzing your budget every month, it'll also help you see where you might be going wrong and where certain categories should be adjusted.
Try and be as realistic with your budget as you can. Writing down in your budget that you won't ever hang out with friends, go on vacations or anything else fun is most likely not realistic at all. Create a little buffer and include an “entertainment” category in your budget if you can afford it. There are free things to do out there, so it's not like your entertainment budget has to be very big.
Do you have any tips for my first budget?
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