How to Make a Budget Work

Making a budget

One of the most difficult things we need to do as adults is to make a budget that we can stick to.  As Americans, we tend to live beyond our means and a budget just gets in the way of getting the things that we want to have right now.  However, without a budget, we are just wasting all of our hard-earned money. 

Budgeting actually gives us a lot more freedom that what you may think.  A budget gives us a snapshot of what we have and what we can afford to do.  If you have a family, you may want to buy a house or take your kids to Disney World.  If you don’t have an exorbitated amount of cash on hand to do these things, you’re going to have to plan for them, and the only way to do this will be to make a budget that includes how much you will put aside to save for the things you want.

Creating a Budget is Easy

Some may think that creating a budget is too difficult or maybe there isn’t enough time to do it.  Fortunately, there are low-cost software applications like Quicken that walk you through the process step-by-step.  If you like working with spreadsheets you can create a simple budget on your own and let the spreadsheet do the calculations for you.  If you are interested in working with spreadsheets, I recommend taking a FREE class at your local library!  Yes, the library has evolved way beyond books and a quiet place to study.

Below is a sample household budget for a 3-person household with an average monthly income of $6300. 

Sample Monthly Budget

After all the bills are paid and money has been budgeted for savings, there is a balance of $853.08 available at the end of the month!  This budget could be tweaked to add more money into the savings accounts for the house and personal savings.  This person could save even more money if they cancel the cable subscription and just keep the Internet.

Budgeting doesn’t have to be painful.  In fact, it can be an eye-opening experience especially when you realize that your daily Starbucks Mocha Frappuccino is costing you about $100 a month (if you are just buying it on weekdays)!  Make a cup of iced coffee in your Keurig instead for about $0.50 a cup!

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