Although there are plenty of free basic outlines to be found online, personal budgeting looks different for everyone. There are as many goals, expenses and ways of budgeting for every person on the planet. The key to successful budgeting is to find the system that best works for you, otherwise it becomes a hassle and you might end up tossing your budget aside.
Find Your Fixed Expenses. These are any expenses that have a set amount that you pay monthly. There are the obvious ones (like rent) and the less obvious ones (subscriptions). Some items that may be applicable to you are: rent, utilities, cable and Internet, online subscriptions like Netflix, prescriptions, car payments, phone bill.
Collect Your Information. How much do you spend on gas a month? On groceries? On going out? The only way to determine this is to start paying attention when you make these purchases. You need to have at least a slight clue in order to add it into your budget. Track expenses with a spreadsheet, an app for your smartphone or the classic pen and paper. That will help you figure out what to budget for later.
Where to Keep It. This is where preferences begin to come in. How you choose to manage your final budget is up to you. You can record your information and keep your budget by hand, on a spreadsheet in Excel or popular online services like Mint.com or You Need a Budget.
Zero-based? Goal-oriented? What? These are just a few terminologies to describe different ways of budgeting. Goal-oriented is pretty straight forward: It’s when you have a goal like saving for a trip or paying off a loan to help inform where your money goes. Zero-based budgeting can seem confusing but it’s actually pretty simple! Essentially, it means that at the end of the month your income minus your expenses should equal zero. So even if at the end of the month you have $100 extra, it needs to go somewhere accounted for, like savings or those new shoes you’ve been eyeing. The main idea of this type of budget is every dollar goes somewhere.
Budgets are Forever Changing. Don’t think that you need to be stuck in one budget for a long period of time. You can even create a new budget every month if that helps you! The amount of income, the price of things and your priorities are always changing, and so should your budget.