Tips On Creating A Budget

We all know budgeting is important, but few of us know where to get started or how to make a budget we can actually use.

These simple steps should help get you out:

Make a list, as best you can, in 3 columns:
1) Income: Use average or estimated amounts if your income fluctuates
2) Essential spending (rent, phone, etc): Use average or estimated amounts for bills that fluctuate. Try to include some amount to transfer to savings each month.
3) Optional Spending (charitable donations, books, etc)

Total each column and make sure that the Income is greater than the Essential plus the Optional. Note: this is where most people hit a wall.

If you need to enter an income number higher than realistic to get the budget to balance, that is OK. You need to decide if there are things you can do to increase your income or lower your expenses – or cover the loss until you can.

A budget is meant to help you out and ease the way you manage your money. It is not meant to be stressful. You should check regularly (ideally monthly for the first year, at least) to see if your actual numbers are close to your estimates, or if you need to adjust your estimates and see if you still balance.

If you have surplus, great! Put some in savings (ideally, you have 3-6 months of expense cushion in the bank) and re-invest some of the money to buy things you need to make your life easier.

About Ean Price Murphy

Money scares many people. But it doesn’t scare me. I don’t want you to have to worry about your “crazy” finances anymore! If you are nervous or confused about money, I will help you become confident, comfortable and knowledgeable around money. I wasn’t born a bookkeeper. I learned it slowly. In fact, I graduated with a Liberal Arts degree, so it wasn’t until my 20s that I started becoming educated about money. After all, it’s just another language, and with a little guidance, you’ll be fluent, too. So if you’re overwhelmed or even embarrassed by where you’re at—fear not! I want your business to be successful, and I will do everything in my power to make it so using my experience as a bookkeeper, business coach, and fellow small-business owner. Want to do your best for your business, your bottom line, and your mental-peace? Let’s talk.