How to Stick to a budget

Budgeting. Not everyone needs to do it but, I know with 2015 being a new year I really am wanting to start saving money where I know I overspend. I tend to overspend on stuff I know I don't really need and should be budgeting my money better so at times I am not having to live paycheck to paycheck. At the beginning of 2015 I posted a One Year Saving Schedule and this should also help me in saving my money and not spending it where I don't need to be spending it. 

FIGURE OUT INCOME.

This is going to be the basis of setting a budget. If you live in a two person income house list all incomes. If you get paid on a weekly basis multiply that by 4 to get a "monthly income" and multiply the monthly income by 12 to get a "yearly income."

LIST ALL EXPENSES.

This is going to be the hardest part. You need to figure out all expenses each month. That includes fixed expenses AS WELL as your expenses that may vary.

Fixed expenses include your rent/mortgage, loans, bills, etc. Variable expenses include your gas, groceries, entertainment, clothing, miscellaneous, etc. You should also include in here, a place for an amount to go into savings. 

DETERMINE PRIORITIES.

This is a big problem for me. What are your priorities? Everyone is different. I have no kids so my priorities would be paying all my bills first and then putting into savings what I have extra. I also like shopping so I would prioritize going shopping over going out to dinner one night. 

SET GOALS & LIMITS.

Obviously you need to start with your income. You have a pretty good idea of how much you make each month. Once you have that amount you need to start subtracting your monthly fixed expenses from the income amount. This will give you a number you can work with and figure out how much "play" money you have. For example, I typically know exactly how much I am going to spend each month on my fixed expenses and most of the time have a pretty good idea of how much money I will spend on gas and groceries - I typically fill up every week/week and a half on gas. When I fill up every week I limit myself to not much "play" money, but if I fill up almost every 2 weeks I have a little extra "play" money to either go shopping, out to dinner or put into my savings.

COME UP WITH A SYSTEM.
If you just say Okay I am going to start budgeting and have no system, you are going to fail. BIG TIME. I use the APP Mint to help budget my money - it allows me to see how much money I have left in each category I have set up and how much extra money I have. Everyone needs to come up with a system - whether it be online, excel sheet or keeping receipts, but a system is going to help you stay focused and when you go over that certain amount you allotted yourself you will notice it. I know when my Mint.com notifies me I have exceeded my budget I get a little mad at myself and try to not spend as much somewhere else.

STICK TO IT.
It may take a little while to get used to budgeting and getting the budget right, but in the end it is going to help and hopefully you will end up seeing it in your bank account. Maybe one day you won't have to budget.

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