People say that “money makes the world go around” and the truth is that it does. If we think about the reason we work and study, “MONEY” will always come to our minds. We almost spend all of our time looking how to make more money and even if we don’t have a bad salary, it is impossible to control all of our expenses.
A great way to wisely spend your money is creating a budget which is an estimate of income and expenses for a period of time. You use it to have more control over the way you are spending the money you earn.
To create a budget, it is important to follow this steps:
Make a list of your priorities
Even if you wish you could buy the whole mall. It is important to make a list of the important bills you have to pay, for example: gas, rent, food, etc.
Add your income
As well as making a list of payments, you should make a list of monthly income. Let’s say you have a job but besides it you own a small business, you should add the salary from your job plus your business income. The result is the total of the money you receive per month and the amount you can spend.
Determine your expenses
It’s not the same thing to list your priorities and to determine your expenses. To determine expenses think about all the things you spend your money on. They don’t need to be vital. For example, if you want to buy a dress or go to the movies, both are ok but remember to track your expenses and add them to this list.
Calculate the difference (the income minus the total of expenses).
Keep a register of your expenses, with it you will be able to cover them without going out of your budget. Determine your objectives. For example, if you want to save money for a trip but you don’t have an exact amount to save every month, you should set a goal which could be a certain amount you want to reach. This way your objective will be to save enough to get to that amount in the less amount of time possible.
The relevance of making a budget is to keep control of your money. You should follow it to the letter so you can reach your goals and spend your money wisely.