There is no question that the word "budget" doesn't bring up anticipation of fun or even freedom. It sounds confining, because no one likes hearing the word "no" over and over.
We should not pretend it's easy.
However, if you can get to the other side to see the reward, then you'll know living according to the budget was the key to getting there in most cases.
Books have been written on this topic, but it's really simple just to get started. Preparing the budget takes some work, but following it month after month is the real test.
Here are some easy steps:
1. Write down all your expenses or record them somewhere. Do this for three months and don't worry about feeling guilty or making changes. You just need a baseline.
2. Next put these expenses into broad categories. Some costs are fixed, such as the rent or mortgage, utility bills, insurance, etc. Other expenses are variable, such as the food budget, car repairs, etc.
3. Note the gap between income and expenses and begin to review what you can do to fill in that gap.
4. Pick whatever tool works for you. Some people like paper, others use an app on the cell phone - whatever is the least amount of work for you. But you have to be 100% in recording your expenses.
5. Review and make adjustments.
This is an oversimplification for sure. But those steps really are the most basic five things you have to do.
Don't get discouraged if you have to start over. The main idea is to get visibility on how money is coming in and going out. Without a plan, we can't see exactly how the money is going out. We just now about how much we have. Tracking is the first key.
And this should become a lifetime habit.
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