How to Budget Your Income in Order to Have Money for Your Essentials

It is hard to have financial success without creating a monthly budget. Unfortunately most people look at the word budget as a bad word. The reality is if you want to have money for your essentials and something left over for fun a budget is a must. Fortunately there are many ways to go about this and many ways to get it done. Regardless if you like a app on your phone, or the tried and true yellow pad, a budget is essential for financial success.

Estimate Your Monthly Take-Home Income

If you want to make sure you can afford your monthly essentials you first must figure out how much you monthly take home income is. It surprising to find out how many people don't know exactly what that number is. It's impossible to get your finances together until you know this number. Find the pay stubs for every working person in the house and calculate this number. Once you know the number you can begin deciding if it is enough. You may be in a place where you need to increase your monthly income in order to make ends meet.

Estimate Your Monthly Expenses

Determining your monthly expenses goes hand in hand with calculating your monthly income. If you are doing this for the first time it might be a great idea to write each item on a notepad. It's important not to leave anything off the list, so if you are doing this for the first time don't be afraid to invest some time into this step. The internet is your friend during this time. Login to accounts, look at online banking statements, and search the web for information you need. Once you have a complete list of your expenses you can begin to compare it to your income. If your expenses are more than your income one of two things has to happen: either your income has to increase or you have to eliminate expenses. It sounds so simple, but so many people don't do this.

Save and Save some More

Saving money is essential. You have your list of essentials but things will come up from time to time. These items may not be on your expenses list. For example, if the ac goes out in the middle of summer you might view that as essential. Having money saved for emergencies will allow you to continue taking care of those things that are essential. Rainy days are going to come but a savings account can serve as a great umbrella.

Control your Wants

It's amazing how advertising can make us feel like we need everything. Items like smartphones, tablets and smartwatches didn't exist ten years ago. Now most people feel like they must have one. These items just scrape the surface of the many things that people have on their wants list. You may want a new sedan to ride in but do you really need one? Learning to control these items will make it easier to take care of your monthly expenses. This step goes hand in hand with the previous step, saving money. If you want something, learn to delay pleasure and save up for it. You will most likely save yourself a financial headache in the future.

These are just a few things you can do to make sure you can handle your essentials each and every month. With a little focus on your budget and planning, you can easily take care of your monthly needs.