If you’re new to the workforce or have just come back to work from an extended absence, earning a regular wage is something you’re likely adjusting to. In order to successfully manage your wage between ‘needs’ like rent and food and ‘wants’ like hobbies, you’re going to need a budget. A budget helps you stay on track with your money by giving you a complete view of how your money moves in between pay cycles. In this post, we’re going to give you some useful tips on how to setup a simple budget.
Starting Your Budget
The first thing to do is choose a place that you’re going to keep your budget and set short and long term goals. Storage wise, we recommend a spreadsheet, like Microsoft Excel, or Google Sheets. Alternately, you could keep a hard copy in a notebook.
While the ultimate goal of your budget is to spend less that you earn, it’s important to set your sights on something more long term. Whether this is a material object, a holiday, or just a particular figure you want to achieve.
Listing Your Necessities
Once you’ve chosen somewhere to store your budget and set you goals, it’s time to start putting the numbers down. Place the total amount you receive in a pay cycle (weekly/monthly) at the top. Then, list all the necessities that you have to pay during that time period. This may include;
- Mobile phone bill
- Internet bill
Once you’ve made completed the list of necessities, add all the amounts together and deduct it from your total pay for that period.
Building Your Savings
With the remaining balance, we’d advise separating a comfortable portion of it to place into a savings account. It’s important that your savings number is sustainable, and can be repeated every pay cycle without hindering you. Even if the amount is $20 or $50 at a time, it’s important to build up your savings to help you in the future.
Plan Your Recreational Money
After you’ve removed both your necessities costs and your savings contributions, your remaining balance can be for recreational use. This could be going out for dinner, shopping, or spending on your hobbies, essentially it’s money to spend however you like, but remember to keep it within that number and don’t dip into your savings unnecessarily. If you have leftover recreational money when you get paid again, a great idea is to add whatever was left into your savings account.
Keep To Your Budget
By creating and keeping to your budget, you’ll find that it far easier to manage your money carefully. It’s absolutely possible to pay for the things you need, grow your savings, and still have some to spend on yourself, it just takes a little bit of getting used to. Just remember to keep to your plan and live within the bounds of your budget.
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