Budgeting, So That You Don’t Need a PayDay Loan
Yes, we just said the “B” word. But before you leave this post, I have just two questions for you:
- How much do you make per month?
- How much do you spend every month?
Knowing these two things, and then writing them is a budget. People are often scared of the word “budget,” but that is what this is. Not as complicated as you might imagine.
What it does is simply makes you aware, and somewhat responsible for, spending your money.
It is quite easy to do on a piece of paper, or for those who have computers, to use a word processing program, or spreadsheet program. You can use something like OpenOffice, which is 100% free. Or if you have Microsoft Office (Word, Excel) you can use those too. Using a computer will make it easier to update later on.
Don’t forget to plan savings, which most people recommend 10% per month, or more; and don’t forget to plan any personal spending money. It is difficult to plan for things which change every month, like utilities, but if you look at your last years bills, and then divide by 12 (since there are 12 months in a year), you can get a pretty close idea of how much you will need. In fact, we also recommend putting that monthly amount into a separate account so that you can estimate for, save for, and easily pay for, your bills that change monthly.
Once you have a good idea of how you plan to spend your money, you simply need to track it. At the end of the month, compare what you spent with what you budgeted, and then make changes to next month’s budget if needed.
You can even use a simple pocket-book register to track what you spend, and just write down things as you go along. You can get one at almost any store for a dollar or two. It will be one of the best investments you ever made.
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