So Many Shoes, So Little Money – Blog

Budget

December 9th, 2008

Money can be like those mornings when you stand, staring into your closet, and can’t figure out what to wear. So you stand there and think, “I have nothing to wear” until eventually your eyes seize on those pants, the ones you always feel fantastic wearing and which make your rear look incredible. You grab them, realizing they will look perfect with a little t-shirt, those cute flats, and a shoulder bag. Lo and behold you’re dressed and looking fabulous! All it took was a place to start. Money is like those mornings. It can seem very daunting when all you need is a place to start. After all, how do you know how much you can spend if you don’t even know what you have? Where do you start? You make a budget.

Begin with your income. You receive an allowance or a paycheck from a job (we’ll talk about the taxes which are deducted out of your paycheck later). Write down what you receive each month, from wherever you get it. This amount should be what your checks and cash add up to after items like taxes are taken out. Next write down how much you spend and what you spend it on. Now, add up and total the money you bring in, and add up and total the money you spend. Subtract the money you spend from the money you bring in. Now, multiply by 12. Since you only used one month of income and expenses you’ll want to multiply by 12 so you have a budget for a whole year. That’s it. You just made your first budget and just figured out something really essential: Whether or not you have extra money, which is the number one indicator of whether or not you are over-spending.

Filed under: Budgeting

Tags: Budgeting