As we all know the weekend is coming up.
It sounds like a good time to do the final step of creating a budget (and doing the first 2 steps we discussed).
This step is getting all of the information you obtained from the first two steps together and combining it; eliminating expenses that are hurting your budget; and organizing the information to a workable document you can use each month.
Before you do all of that, you need to find a place to record the information to make it into a usable form.
I recommend using one of the following methods:
- Notebook (Spiral or composition one)
- Spreadsheet software (e.g. Microsoft Excel or Google Docs Spreadsheets)
- Ledger paper (You can find them usually at an office supply store)
It doesn’t matter which method you choose, but it needs to be one that you will use consistently and frequently. It makes no sense to use a method that you won’t be seeing at all.
Now, you need to get the monthly income amount you got from the first step of creating a budget and record that number down. That will be your Total Income amount for the month.
Next, write down the amounts you came up with for your monthly expenses from the second step of creating a budget.
Add up all of the totals of each monthly expense and write down that number. That number will be your Total Expenses amount for the month.
Subtract your Total Expenses from your Total Income.
If you get a negative number, find out what expenses you can eliminate or reduce in your budget (Think of expenses you don’t use as much and variable expenses- e.g. Subscription to a magazine you don’t read that much or Groceries).
If you have a positive number, keep on keeping on. However, there are still ways you can reduce on some of your expenses.
I will give you tips on how you can reduce the amount you pay for certain expenses each month next week.
If you have any questions along the way please let me know.
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Have A Great Weekend