How To Set Up a Budget

One of the keys to frugal living is having a budget.  It is very important, yet one of the hardest things to create and be accountable for.  There are many things you can do to maintain the use of your budget, but I wanted to talk first about how you create a budget.

When I was growing up, my parents were a wonderful example of living on what money you have, but never taught me how to create a budget so you are deliberately spending or saving your money.  I think that is a common theme in the world today.  The art of budgeting isn’t taught in homes or in schools.  It is a sad thing because the United States is having budget issues on every level of government because people aren’t taught that budgets have to be balanced.  People are taught that debt is normal and just the way you live your life. So we continue to see the government and families go further and further into debt and never see a way to get out.

It is possible to get out and to live on what you have.  It may take faith in whatever your belief is and it may take you going without or making due with what you have, but it is possible.  You just have to decide to do it and stick to that.  Creating a budget is the first step to making that decision and living it.

The first step in creating a budget is identifying your needs.  Needs are Food/household products, Shelter, power/water, and clothing.  These items should always be done first in a budget because without them you will not live.  So they are the most important parts of the budget.  Once these are filled you can move on to other utilities like phone and internet.  These are items that are not a must, but they make life a little easier and livable.

At this point you need to check your income level and see what is left.  Whatever is left is money you can “play with”.  Now you can fill in the things you would like to have in order of importance to you.  If you have the income, it doesn’t matter what is in these categories.  Each person’s will be different and that is ok.  You just have to know your priorities and go most important to least important.  Once you are out of money in the income category, you are done.  Stop going down your list of wants and save the list for later when ou have more income or are finished with some of the other items on your list

You now have a budget that helps you live within your means and also live a life you want.

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How do you set up your budget?  Any tips or tricks you would like to share?  Please feel free to have you comment in the comments section and share your knowledge.

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