What does budgeting teach you

And the best part is that it happens quickly. I can almost guarantee that if you start budgeting today, and really analyze your financial habits, you will find plenty of expenses you can cut. Debt was one of the reasons I started budgeting in the first place.

You see, before I created my first budget, I knew my wife and I were paying a lot of different monthly debt payments. The problem was that all my financial decisions were based on monthly cash flow. In other words, if I could afford the payment, that meant I could afford it. Seriously, the first time I sat down and added up all my monthly debt payments, I wanted to vomit. Can you say, bad decision-making? If only I had taken up budgeting a few years earlier, I could have saved myself a lot of financial hardship.

One of the best lessons budgeting can teach you, is that the more intentional you are about improving your financial situation , the better it will get. I know, because for many years, I was just flying by the seat of my pants when it came to money.

I would save a little money here and there, and dabble in investing, but I never really did anything on purpose. Whether or not my financial situation improved was just a symptom of my spending that particular month.

To put it plainly, my savings were dismal and my net worth was less than zero. For instance, when my wife and I created our original budget, we set a number of financial goals. Learn how to budget and create a spending plan. Budgeting Guidelines Budget Calculator. Saving for Education Saving for a Home. Our Services Accreditations Contact Us. You are here Home. What is Budgeting? What is a Budget?

Budgeting is simply balancing your expenses with your income. This will not only help you juggle your payments, it's also great for your credit to never miss a payment. Plan your errands so you don't have to make unnecessary trips. Make lists when you go to the grocery store so you don't forget something you'll have to pick up later.

It's typically easiest to create a budget on a computer, either in a spreadsheet or using budgeting software. Spreadsheets allow you to easily calculate your budget in numerous ways e. Once you've decided how you want to create your budget, you can get started. Start with your income. Track the amount of money you have coming in every month, from jobs, work study, scholarships, grants, student loans, or money given to you.

When tracking income from your job, it's easiest to use the amount you take home after taxes. This is the pool of money you have available for your budget, so get it as accurate as possible. To return to the budgeting steps navigation, press shift plus tab. Track all expenses — even the little things. Think of everything you pay in a month; use receipts or bank statements to ensure you think of everything. Track spending cash as miscellaneous or with another category that makes sense; just ensure you track it.

Plan for all types of expenses. Don't just track the obvious expenses like rent and auto insurance; make sure you include variable expenses like gasoline and pet care.

Plan for infrequent expenses. Things like gifts, license plate renewal, and doctor visits may only come up a couple of times a year. Planning for these expenses allows you to work them into your monthly payments or set aside some money for them ahead of time. Use accurate descriptions. Track everything by what it is rather than where you purchased it so you know how much you spend in certain categories. Just knowing where you shop doesn't help you keep track of the details of what it is you spend money on.

Update your budget daily. The easiest way to keep on track with your budget is to keep it updated as often as possible. Tracking your money will take minimal time if done daily, and you'll be much less likely to forget something. Budget monthly, not by the paycheck. It forces you to think longer-term without feeling your budget is impossible to maintain.

See how you're doing with your current monthly spending, and whether or not you need to reevaluate it, by entering the appropriate amounts for the upcoming month in our budget checker. Please fill out all fields with positive dollar amounts. The following fields need correction:. Tip: If you're in school, you likely only receive loans, grants, and scholarships once per semester, but it's a good idea to average that out per month so you have an idea of your monthly income allotment.

If you need more income, check with your financial aid office to see if you qualify for Federal Work Study or look into a part-time job on or off campus. If you're out of school and repaying your loans, add up your paychecks for the month to get your job income for monthly expenses.

Tip: If you think you're spending too much here, consider finding a cheaper place or getting a place with a roommate. Utilities and communications are generally easy areas to cut back on, if needed. Call your utility companies to ask about ways to save, consider more eco-friendly light bulbs, and unplug all electronics when you're not using them. Tip: If you need to save more here, consider a more affordable vehicle like a scooter, bike to work when you can, and shop around for the best insurance rates.

Vehicle loan, gas, maintenance, insurance, parking, licensing, etc. Tip: There are always preventative measures you can take to stay on top of your health e.