My least favorite thing. Probably because it feels hard to budget when you have no money. But the only way to get out of that no money hole is to make a budget. Budgets are really based on percentages so the first thing that you need to know is how much money you are making per month. That is your starting 100%.
Before you make a budget I suggest taking a month and really looking at your spending habits. Make a list of everything that you are spending and where. At the end of the month, add all of that up and really see where your specific expenses are. See how much you spend on Housing, Utilities and your bills. Than transportation. Then how much you spend on food and eating out. Then everything else. Not only are you looking at your habits and finding your problem areas but you are identifying just where you can save.
- Total Income: 100%
- Housing: 25-30%
- Transportation: 5-15%
- Groceries: 10-15%
- Personal Care: 5-10%
- Health Care: 10-15%
- Loan Repayment: 10-15%
- Utilities: 4-7%
- Entertainment: 4-7%
- Savings: at least 10% of your income should be set aside as an emergency fund for at least a year.
So let’s look at this on the scale of a 1,500 dollar a month budget (though most people will be making more than this.
- Total Income: $1,500
- Housing: $375-$450
- Transportation: $75- $225
- Groceries: $150-$225
- Personal Care: $75- $150
- Health Care: $150-$225
- Loan Repayment: $150-$225
- Utilities: $60-$105
- Entertainment: $60-$105
- Savings: $150
Making this, I really do look at it and wonder “Where the Hell is all my money going!?” which is exactly why you should be making a list of your spending. I know that Target is a weakness of mine, as is Amazon. So those are places I know to stay away from after looking at my spending habits.
To make a budget is really an exercise in being honest with yourself.
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