Its often considered a dirty word among many people. Its probably understandable when you think that most people have this perception of budgeting as something that restricts you from buying the things that you want when you want to have them.
If you picked up a dictionary and looked up budgeting you would probably read something like this:
“Budgeting is itemised forecast of expenditure expected for some period in the future. “
Sounds pretty boring and dull right? How can you make an itemized forecast for every expense that you possibly have within a period? And then stick to it? Im sure some people can but I am not one of those people yet I still believe I budget successfully.
So what is budgeting all about
Budgeting is more about understanding what expenses you have in the past and present so that you can plan for the future. Reduce the expenses that are not essential, but more importantly spend more on the ones that are important and perhaps save as well.
For example a while ago I discovered that I was spending $20 a week on Red Bull. Don’t get me wrong I like Red Bull but I have better things to spend $20 a week on than Taurine.
Well some expenses like electricity, telephone and Internet are going to be pretty easy to estimate when drawing up a budget. These sorts of Expenses wont change significantly on a week to week basis. However the majority of expenses will such as food and entertainment these you can establish a contingency and reward yourself for clever thriftiness.
Use excel, its brilliant for making budgets
When drawing up a Budget I use Excel, in earnest I probably went a bit overboard and my spreadsheet takes into account all forms of income and expenses I have every week, month or year. Still even a simple budget can help you get the most of your money.
Would love to hear if you have any other suggestions or comments please post some comments.