No matter how much money is made, finances can easily spin out of control if they aren’t accounted for. In order to prepare for your financial future and enjoy your current financial state, a daily budget needs to be in place. The following tips on how to make a daily budget can be done in a few simple steps, and once in place, can be easily updated as needed.
Start Keeping Track of Where Your Money is Going
You may think you know where all your money is going, but most people are surprised when they start keeping track. Keeping track means really keeping track. Using a notebook, simply write down every penny you spend throughout the day for about a month to give yourself a solid view of everything spent. A month is usually enough time to see every bill paid.
If you share your finances with a partner, keeping track won’t be helpful unless you both take part in doing so. Using a couple notebooks that you can both take with you wherever you go makes logging your spending quick and easy. At the end of each day or week you can compare notes. You’ll be amazed how quickly things like gas or several cups of coffee add up.
Know Exactly How Much Money Is Coming In
It seems like an obvious thing you should know, but go ahead and write it down where you are working on your budget or spending log. That total number is needed to subtract spending from, so you know what is left over.
Once your spending log is complete, add it all up—bills, miscellaneous, everything. If you are in luck, the amount of money coming in far outweighs the amount spent. However, if the amount spent for the month is more than what is coming in, your budget needs some work.
Create a List of Needs and Wants
This part can be tough because we all want lots of things! You, and your partner if necessary, will have to spend some time thinking this through. Sometimes the mindset needs to change about what is a need and what is a want.
Obviously, getting bills paid and getting out of debt are needs. If you have never had an emergency savings or started preparing for retirement, now is a great time to consider these ideas as you work on your budget. Don’t let the thought of adding to savings or retirement scare you. If you can only put a small amount away for now, it is a start. Your budget can be revisited again down the road.
Sometimes the thought of how to make a daily budget sounds constraining, but it really is the opposite. Having your finances in order is a huge stress relief and frees you from the burden of worrying about money.
