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Working Out a Budget - Tips to Create a Balanced Budget

July 19, 2012 | Comments: 0 | Views: 132

It's that time of the month again. That dreaded time when you sit down to go through your income/expenditure, then it hits you, you have more money going OUT than you have coming IN. You have no idea how this happened, but somehow along the way you have ended up spending money which you simply you did not have, and you are now paying for it, this manifests itself as you deciding which bills are more important and which ones you will have to set aside or ignore.

Naturally this constant struggle does become exhausting after a while.

On the one hand, creating and having the will power to stick to a budget is not be the most exciting prospect, On the other hand it is a vital part of avoiding making the dreaded decisions of what bills to pay and what not to pay. A budget is also an essential tool that will enable you to ensure your personal finances are in order.

Contrary to popular belief, a budget isn't all that difficult to create, where most people struggle is sticking to the designed budget. Today, we are going to look at how to establish your budget.

How to Create Your Budget

There are a number of software available which you can use to create you budget, (if there is enough requests, I'll put up a list of what I think is worth using) using home budget software, or an online software it is easy to create your household budget. Before using software or using Excel though there is some information that you will need to have to hand so the budget is as accurate as possible. Below are just a few tips on the information you will need to set your budget up.

Financial Records - Get together all your financial records before you begin. This will usually include your utility bills, debit card receipts, bank statements, and other regular expenses.

A Record of Income - Sources of income should be recorded with whatever medium you have chosen to use. This will include your regular salary from your work, any other source income, child support, and of course any benefits you receive.

A List of Your Expenses - Every month, you pay a certain amount of money for your living expenses, these are expenses that you have on a monthly basis. These expenses are utility bills, child care, rent/mortgage, car payments, car insurance, groceries, dry cleaning, savings, and entertainment all of these expenses need to be written down or entered into whichever medium you are using to create the budget. What you tend to find is that these expenses can be split into 2 categories, fixed and variables. The difference being that, a fixed expense is one where the amount you pay never changes, these are usually the essential expenses like rents, insurance and mortgage. The variable expenses are the expenses you could probably survive without and the amount you pay is not set in stone.

View the Results - When you finish in-putting your income and expenditure details, you should now have a clear picture of the shape of your finances based on what you earn and what you spend. The aim here is to have you income supersede your expense, so if your income is higher than your expenses then you are already half way there, however if your expenses are higher, you will probably need to take a good look at you list of expenses and figure out how to reduce it.

Tega Diegbeis a professional Debt Advisor at Debt Out LTD Local. For any type of debt advice or debt management help, Give debt out a call on 01296 489 387, or visit

Source: EzineArticles
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