Budgeting 101

Let’s go back to the basics. Budgeting! Here are Divas R Frugal we live for a good budget. This allows us to control our money by knowing exactly where our money is going. Let’s talk about what needs to be done before, in creation of, and after you creation of your budget.

Before the Budget

Track Your Expenses – This can be done by looking at your back statements/credit card statements. Look at what you are actually spending money on. I know I can get a lil crazy in the food/restaurant category without a budget. This will not only help you see where your money is going but it will allow you to create a more realistic budget.

Create the Budget

You will need to know your  income and your expenses to complete your budget. If you are paid via check then you will have easy access to your income ( net income) that you are bringing home. To create your budget, start off by listing all of your expenses and payout amounts.  When listing expenses be sure to include leisure activities. Next you will subtract your total expenses from your income.

I like to practice zero based budgeting because it allows each penny I earn to work for me and eliminates waste.  After you subtract expenses from income you will then further budget the remaining amount until you have reached zero. Use this money for savings, to help pay down bills etc.

Now if you are in the negative or breaking even when you subtract your expenses from your income, then you will need to make some adjustments. Look at your list of expenses and see what you can cut, or you may need to look into ways to gain extra income.

After the Budget

Budgeting is not a one and done thing. I honestly don’t think that it is something that you should only do “every now and then” either. Budgeting is a lifestyle. It is not the most fun to do lol. It also takes practice. You are human and some mishaps will happen.

Get into the the habit of reviewing your budget every time you get paid. When I do this I sleep easy. I hate being unsure of what goes where and trying to make sure I don’t end up over drafting my account or something else drastic. Also things change so you want to know where you stand financially.  

Of you are not into the pen and paper method like me, there are a lot of different budgeting software and budgeting apps waiting on you.

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