How to Budget your Money

One of the powerful tools in life, if we know how to make it work for us, is money. Many of us work hard for our money but the fact that a majority of us do not keep track of this same money once it reaches our bank account is a reality.

To ensure financial health we need to learn how to budget our money. Writing down all of your income and expenses will help you to realise where all of your money is going. The likelihood that you will be surprised is high. All of the small expenses that you don’t realise at the time of making the purchase are the ones that will add up the quickest. Those couple of euro’s each morning to buy that much needed coffee and the sandwich you purchase each lunchtime can easily add up to a couple of hundred euro’s each month. This could be money that can be used more sensibly. 

The first action that can be made to learn how to budget your money is to write everything down, no matter how large or small. Begin by writing your monthly income at the top of a sheet of paper to show how much money you have each month to spend. Write down all of your monthly expenses such as rent or mortgage payments, utility payments, car payments and any credit cards and additional expenses that you may have. Now do your maths and see how much you have left at the end of a month once all the expenses have been subtracted.

This will become your first budget and now that you have it you will be able to see at a glance exactly what your money is doing every month. It will become easier as time goes on to take control of your money and once you are able to do that you can begin to set short and long term goals for your money.

It is possible that it may take some time for your money budget to register with you properly. Many people state that it can take up to 3 months before they have grasped their budget and financial situation. If you have never been taught or taken the time to learn how to budget then the best way to get started is to just get started.