A guide to help you get started with budgeting.

Creating a budget

3/4/13

Those who have a limited amount of money (don't we all?) need to learn how to budget it properly. Neglecting to budget results in wasteful spending and reduced savings, if there are any savings at all. When you create a budget, you take control over your finances. Follow these tips to create a personal budget.

Look at your spending habits.

Do you know where every dollar you spend goes to? If not, you need to figure it out. Impulsive spending has become much easier since the rise of debit cards, credit cards and ATMs. Online shopping poses a particular problem; just click a button and it's done. To create a workable, realistic budget, you'll need to assess your spending habits for about a week. Keep all your receipts, and take a look at your online banking account. This will help you see where your money is going in order to categorize your spending. It will also make you aware of any bad habits you need to eliminate.

Create a budget.

Once you see where your money goes (or where you'd like it to go), it's time to sit down and make a budget. While there are many budget worksheets available online to get you started, they're often lacking a plan for irregular expenses like school clothes, annual membership fees, auto insurance and the like. Start by listing your monthly income. Next, list your monthly expenses. If your income exceeds your expenses, you're in fairly good shape. If your expenses exceed your income, you need to cut some of your expenses or find a way to earn more income.

Typical items to include in a budget are: