It is never too late to start to know how to manage your income and expenses and take full responsibilities for it. Most people including you and me have limited resources. That is why economics often emphasizes “trade-off.” Your income is usually fixed and has so many things you would like to buy or so many places you would like to go. Some people might say that they want to eat all delicious food or buy all the beautiful clothes in the whole world. Every day you would struggle about it. If you buy this, you cannot buy that. It does happen very often. To avoid this, let’s check out what we can do about it.
Six simple steps to create a budget:
1. Calculate your net income
2. Keep a track of your spending
3. Set your financial goals
4. Make a plan
5. Make an adjustment anytime
6. Keep moving forward
In How to Balance Your Income and Expenses, you would know some tricks about how to spend smart within income:
1. Keep a track of your spending to realize exactly how you spend and what you buy unknowingly
2. Have a second thought about what to buy to avoid buying what you do not need.
3. Reward yourself occasionally after working so hard.
4. Make the best use of your money and have a bigger discount and save a lot.
5. Make a payment plan for a bigger amount like expensive goods or buying a house.
6. Limit your credit card limit to avoid losing the sense of money and spending over your ability.
7. Start to save money today for a rainy day or your retirement or your kids.
8. Invest yourself to increase your income in the future.
In 16 Top Reasons For Budgeting To Improve Your Life, you can find many good reasons to create your own budget:
1. Have a clear picture of how much you have and how much you would like to spend.
2. Learn how to manage your money instead of your desire controls you and your money.
3. Balance your income and spending to avoid over-spending.
4. Manage cash flow to prepare for the future and do what you have to do.
5. Track your progress to see if any improvement needs to be done.
6. Achieve your financial goals faster.
7. Set priorities and know what to do first or what matters now.
8. Get focused on your goals.
9. Buy what you really need from your list.
10. Save for the raining day because you never know when you would need it.
11. Improve your relationship with your family and work as a team to decreases the possibility of argument and conflict about how to spend or manage money.
12. Avoid spending too much like credit card debt and any type of loan.
13. Less or no debt to avoid high interest of debt and credit card revolving interest.
14. Help you behave yourself and have more disposable money.
15. Time to change if you want to have a life free of debt.
16. Improve the quality of life after you have better control with a budget.

I would strongly suggest that most of you put these in mind. Nobody or no company would guarantee you a stable income and life. According to the news in Dec 2018 – Jan 2019, thousands of federal employees were furloughed for over a month due to the United States federal government shutdown starting on December 22, 2018. Those federal employees had no paycheck at that time to pay their bills and debt. They needed to ask for extra help from another resource outside. You could not be sure if you could get extra loan or money to survive for a tough time. That is the point that I would like to emphasize here to prepare yourself for a hard time. You would face a similar situation once or twice.

I know it is not easy to face it and deal with it. But, it is the right thing to do. At least you can keep it in mind and figure out how to do it. You can come up with a solution to achieve your goal in your way. Here are certainly some tips to help you create a realistic and practical budget plan into action. You have to be open-minded and be honest with yourself. That makes your budget fair and true. I believe that you would want expensive or luxury products. What you should do is create a suitable budget to make it come true. Let’s take a look at more details:

1. Calculate your net income
A budget is a way to help you realize how much you make and how much you spend. It gives you the direction so that you know where to go. You would know whether you're on the right track or not. Therefore, you can make good use of a budget to help you make your dream come true. Just consider it a guideline to measure your progress. You would have a clear picture of making the right decision and progress.

At first, you can list how much you make every month. Watch out! Do not overestimate your income or be too optimistic if you are not quite sure about it as a bonus. It happens often. Subtract your deductions like social security and taxes to calculate the net income. The net income is how much you can actually use in a budget.

If you are good at a hobby or an expert in a certain field, you can make good use of the weekends and holidays to have an extra income way. Then you can achieve your goal faster. In Work From Home Jobs $100+ Each Month, I list many ways to do so. Here are some examples:
 You can fill out the questionnaire online in Survey Junkie & Swagbucks.
 You can complete opinion polls & daily goals in Swagbucks.
 You can be a freelancer or virtual assistant in Fiverr.
 You can start a blog/website within minutes.

2. Keep a track of your spending
Every time when it is the end of the month, you would wonder why your salary is enough to support your spending. Day by day you may not remember very clearly about it. You can hardly recall how you spend it all. Therefore, you need to start to keep a track of your spending and separate them into different items. Then you would figure out where your problem is and make adjustments. It would help you realize which part you spend too much and needs to cut back.

At first, you can collect all of your receipts and credit card transactions and list all of your expenses like fixed expenses. Those include expenses like utility bills and rent. These are how much you have to pay for sure every month. It means no matter you have a paycheck or not, you have to pay for it. You cannot say that you are not prepared for it and unable to pay for it. What you need to do is know how much you earn and pay every month.

Second, you can list all of your variable expenses. Those include widely like shopping for groceries and eating at restaurants. Those are not fixed and can be controlled. You can go out every week or you can eat at home. You can buy expensive and high-end meat or you can buy normal meat. This part could be saved and adjusted a lot. Right now credit card or bank statements would categorize your expenditures to help you have a fresh start. After recording for two months, you would know exactly the details and do not miss any expenses.

Here are some what you would use in your budget:
Home – loan, rent, maintenance, utilities
Car - gasoline, maintenance & repair, insurance
TV - Television, cable, Netflix
Phone – fixed & cell phone & internet
Entertainment – movies, KTV, sports
Insurance - health insurance

Small amount payment may seem little but a pin a day is great a year. You should never underestimate the power of it. In modern society, many software and app could help you keep a track of your spending. Therefore, you would realize exactly how you spend and what you buy unknowingly. Observe your record for 1-2 month so that you can figure it out how to make an adjustment.

3. Set your financial goals
To create a budget can help you achieve your financial goals faster. Try to divide your financial goals into two parts:
 To save money for the short-term goal like buying Christmas gifts.
 To save money for the long-term goal like buying a house or having an early retirement
 To pay off the short-term debt like credit card statement.
 To pay off the long-term debt like a mortgage loan.
You have a goal in mind to help you know where to go. Try to decrease your monthly expenses every month and have money left. Or you can try to have extra income to cover your expenses. Then you can save money or pay off debt. Do not increase any more debt because it would make your financial goal harder to achieve.

4. Make a plan
After you have most of the fixed and variable expenses, you have a better clue about how much you earn and spend every month. Based on your experiences and habits, you would know your variable expenses. Then you would know how much to input and calculate it to create a budget. For example, you can break down your expenses to identify where the issue is. Your rent is the same every month and belongs to the fixed expense. You drive to work every day and need to fuel up. It means that gasoline is the variable expense.

5. Make an adjustment anytime
After you input all the income and spending data, you can track your spending record and find out where you can cut from it. Sometimes changing a small habit like a cup of coffee for $5 every morning could mean a lot. It means that you can save $150 a month. Or you can watch movies and eat at home to save hundreds of dollars. As long as you lower your desire or want and squeeze enough, you can save at least 10%-20% of your income. If you are not good about it, you can practice more and find out the reasons why you fail to make it and adjust it. If your income, expenses, and goals change, you should adjust your budget any time to show it.

6. Keep moving forward
It’s important that you take a serious look at your budget and keep open-minded. Nobody would judge you from it. You can list more details and compare the difference between this month and last month. Therefore, you would know how to adjust your spending and make you better. The point is to help you understand your financial situation and achieve financial goals. Enjoy the process and encourage yourself along the way. I believe no matter what your goal, you can definitely achieve it.

If you don’t have a budget, follow these steps would easily help you deal with it. You would have a powerful tool to help you stay on track. You would achieve your financial goals and freedom. You would have a bright future.

Author's Bio: 

Hello and welcome to my personal balance of life blog & read my article!

My name is Madolyn.

Hello! My name is Madolyn. Let’s explore the possibility of the world and improve the balance of life which includes mental balance, work-life balance, and balance your income & debt.

Sincerely, hope you all enjoy yourselves and get what you want.