Making a Monthly Budget

When it came time to live out on my own, their were quite a few factors that made things difficult in my life. Learning how to manage my bills, and monthly expenses turned out to be quite a hassle. But I figured out quickly that keeping a monthly budget can make a world of difference in where I end up at the end of each month.

Now why is it important that I keep a monthly budget of my expenses. Well, I noticed that when I did practice these principles, I was usually better off, or should I say financially stable. I didn't end up pulling my hair out, or worrying about if I had enough money, so to speak. To be honest I always didn't have mounds of cash stashed away, but when things were keep in order, I was confident that I would always have enough money to pay my bills, and even have a little bit for fun. Peace of mind, and confidence in my ability to pay my bills, and not be worried about where I stood financially was a big comfort to being able to make it on my own.

So to start out, I made a list of the things I had to pay for on a monthly basis. That meant bills. Things like cell phone, utilities, gas, internet service, insurance, rent, spending money for fun, and even the unexpected. I figured out what each of these would cost me every monthly based on some of my spending habits. Because of course utilities can vary from usage, and time of the year but averages work out fine. Then I compared all these things to what I was making each month.

At this point it would be nice to have something like excel to help you calculate all these things, but of course there's alway free software they can take it's place. I would suggest using something like google documents, a nice free web based software suite, or open office, which is basically a open source copy cat of Microsoft office. Or I have a link to an old fashioned resource, aka sample budget document that you could just print off, and use old fashioned reliable pen and paper.

Once I had these things laid out, I could examine my expenses, and maybe even rule out where I could make some cutbacks, or just realize what I'm spending way too much money on. After looking at how much I spend, I could evaluate what my monthly spending should normally be for each of these things, and set a goal limit I should keep on each. The hard part of it all really would be sticking to the plan. Making sure I don't go over my spending cap on each of those things. You need to keep track of it throughout the monthly. Some people like doing this right when they spend money on something, were others might find it more useful to do this on a daily or weekly basis. It really depends on the person.

Although there are some great tools out there for making this task a little bit easier, and even automated. Some people like to use online banking to constantly check their accounts on the go. But some drawbacks of this are that if you spend money through checks or through debit used as credit, all of your transactions don't show up immediately, and you could find yourself with some surprises later on. I was referred by someone to try out a website called Mint.com which helps track your spending on your bank account, and credit cards. It even automatically distinguishes where you spending your money, and puts it into categories, and budgets so you can set goals, and notifications for when get out of your budget or normal spending habits. Although it may take some time to setup, and if you bank we a lesser known company your bank may not be supported with their system. But it's worth a try since it's free, and they have mobile apps for those on the go.

But in the long run setting up a monthly budget helped me getting my spending into control, and keep me from living outside my means. The overall welfare of my life was improved, and I had less to worry about. Which meant more time for relaxing, and having a stress free environment. I can tell you from my experience that it's a great idea, and should be practiced by pretty much everyone. It takes time to get into the habit, but it's well worth it.

To wrap things up, here's a few links to some of the things I referenced to, or mentioned in the article that could help you out with starting your own budget.

• Welfare - Great website where you can learn about welfare principles.
• Sample Budget Document - The pen and paper solution to making your first monthly budget.
• Google Documents - Web based office software for free from Google.
• Open Office Software Suite - A great free open source software substitute for Microsoft Office.
• Mint.com Personal Finance & Budget Software - Free web-based financial and budget software that has mobile applications.