Prepare a budget in 4 simple steps and manage your finances

Many people do not want to hear the word budget let alone prepare one for themselves. They think they know how much they earn and how much to spend and there is no need to put them on paper, or hear them say that there's no budget anyway! Sure, just keep plodding along day after day doing their best to keep ends meet without doing something creative to improve their financial situation.

Budgeting is a planning tool to use so you can get a clear picture of your income and expenses for a specified period. It is a statement that shows you the source of your income and expenses projected with the vision to meet these expenses.

A personal or family budget for the year and pulled out on paper is more likely to be implemented in a budget relegated in your memory. There is a sense of commitment, once you put some efforts in making a budget on paper that you wish to attend. So let us create a monthly budget based on 4 simple steps.

1. Create a budget spreadsheet

If the wages are paid every two weeks, multiply the net salary, as shown in your paycheck from 2 to come with a monthly amount. We are using the net pay because this is the money actually deposited into your bank account by your employer who will be budgeting.

Open MS Excel spreadsheet and type in my budget for the year 2010 as the title and make 13 columns. On top of the column type in a description and column 2 to 13, like every month - January, February, March, April, May, June, July, August, September, October, November and December.

2. List the sources of income

Under the title description, type of income and under it list all your income from all sources (net pay, allowances, other income - name individually) and put the amount for the corresponding month when you expect to receive them. Be as accurate as possible, add each column, and to emphasize the total amount under it, then type in the Description column subheading total income.

3. List of miscellaneous charges

Now we will identify the costs and we base the amounts from the last bill you. If you know for sure some of the costs will be higher, use the updated amount. In Description column, type of expenditure and under it list all your expenses, such as food, clothing, mortgage payments, utility bills-Lighting, Telephone, Internet, gas and heating, education, transport, car loan, local tax on properties .. Add these and enter the total expenses and total label.

4. Take the difference of the costs of income

Finally, subtract total expenses from total income and see if you are in red, which is your income is less than your expenses. If the amount is in red put a parenthesis or negative quantity.

If you are in red, do not panic or despair, so many people are in the same situation, you are not alone! This is one of the reasons why we are creating a budget-to find out where is the problem and seek solutions.

In general the way to solve the problem of being in red is to increase the income and decrease costs. I will not delve in detail how these will require and deserve a more in another article. Some ideas to increase your income is: find a part-time, selling more on eBay, offering their services in the community to pay, etc.

Ideas to lower your costs - bring your own lunch to work, to minimize eating out in expensive restaurants, to minimize the purchase of cappuccino at work, organize a car pool to go to work rather than driving a car Turn off the lights in the house when nobody is using, minimize going to the movies, quit unhealthy habits like smoking, do not buy new clothes for a year, use what you have, etc.

The above are examples of what you can do to save money to improve your financial situation, and I'm sure you can think of more ways to save. The important thing is to take the problem by the horns and find ways to solve, because unless you do, the problem remains, and blow up.

Finally, congratulations you've created a personal budget / family for you! Stick to your budget and its implementation.