How to Prepare a Budget

Sergio Roberto

With today’s rising prices, it is becoming more and more important to prepare a budget and stick to it. If you want to get the most out of your hard earned dollar, take some time to evaluate your financial situation and prepare a budget.

Evaluate your current expenditures. Take one month and jot down all of your expenditures. To truly prepare an accurate budget, you must track everything from purchasing the daily newspaper to the lunchtime candy bar from the vending machine.

Track all of your income. Usually this is the easiest part of the budget. Most people know how much money they make each month.

List all of the expenditures. After a month of tracking your expenditures, prepare a list of expenditures. It’s best to categorize them into fixed and modifiable expenditures. Your rent or mortgage payments would fit under the fixed expenditure category, while dining out and weekly manicures fall under the modifiable category.

Total your income and expenditures and compare. Hopefully your comparison of income to expenditures leaves you with earning more than you spend. If not, it’s time to look at your budget a little closer, especially the modifiable expenditures. Look to see where you can cut back or eliminate so that your income exceeds your expenditures.

Prepare a realistic budget. Now that you know how much money you have coming in and how much going out, and where it’s going, it’s time to get the most for your money. Make sure the budget is something you can follow

Review your budget regularly and make modifications if necessary.