Create Yourself a Budget

- Wednesday, November 28, 2012

Anyone who tries to tell you that budgeting is fun, is either lying to you, or a super-nerd. Because we know you don’t like liars or nerds, we’ll give you the hard, honest truth. Budgeting is the worst.

But, if you don’t do it, you’ll never know how much money you could be saving. At the end of the year, that could make or break upgrades on a car purchase, or snagging a lower interest rate on any purchase by being able to put more money down.  This is your life we’re talking about. Take charge of it one step at a time.

Income Vs. Expenses

Let’s start at the very beginning, which, in this case, is comparing your income to your expenses. Say, for example, you make $1000 per month after taxes, insurance and social security. The idea is to not go over this much money in one month, and hopefully save a few bucks to hold you over.

Document everything you spend money on for the first week of the month. Aside from rent and other necessary bills, what are you spending your money on? Chances are there’s a cheaper way to make these desired purchases.

Purchasing groceries and brown bagging your lunch can easily save you at least 30 bucks a week. Brewing your coffee at home instead of stopping by the coffee shop in the morning can save another 20 bucks a week. Trust that this cash adds up at the end of the month.

Realistic Boundaries

Budgeting is very similar to dieting. If you’re too extreme you’ll cave, and your plan will backfire. It’s in our nature to indulge in guilty pleasures. Make sure you set aside a realistic dollar amount for socializing and some minor retail therapy.

With that being said, budgeting doesn’t allow for supporting bad habits. If you don’t have the money to be smoking a pack of cigarettes per day, you better learn how to grow your own tobacco or look into some 12-step programs.

Facing Facts

The daunting task of drawing up a personal budget is nothing less than ugly. You’re forced to face your flaws and watch attentively as all your hard earned cash disappears from your fingertips. You’re not only taking a magnified glass to your dollars, but your lifestyle as well. And being the true American you are, you know that bad habits die hard. Test out your budget for one week; just a seven day trial, and take it from there. Adjust accordingly, rinse and repeat.

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