Money Management 101: Have a Budget

Having a budget is more than just knowing how much money you have to spend for the month.  You have to get to the nitty-gritty of things and scrutinize every expense you have.  Budgeting is all about allocating what you have for your specific expenses.  Ideally, you are supposed to start the month with a budget already laid out.  But, if you are just starting to put your household expenses in perspective, you have to backtrack a bit and examine how you spent your money in the past month.

Try as best as you can to remember everything you spent last month.  As it would be difficult to remember where you spent every cent, recreating your budget would not likely add up to the exact amount of money you started out with.  With your previous month’s spending down on paper, you can then start doing the same thing for all your expenses this month.  Put your starting amount at the top of the page.  List down each item you spent your money on every day and deduct the expense from your running total.

These two expense sheets can be your basis for allocating your funds for the coming month.  Remember to allocate money for your savings too at the start of the month – this should be your first item to be deducted from your monthly income.  Based on your two expense sheets, allocate your remaining fund for your recurring expenses like rent, groceries, utility bills, transportation costs, communication costs, and loan repayments.  The rest of your expense items would then be considered as incidentals like entertainment costs and shopping.  With an itemized budget spreadsheet, it will be easier for you to spot opportunities for more expense cuts and more savings.




  1. Yes, it helps a lot because then you can look back what’s have you spent differently and balance it out the next month or spend less.


  1. […] 101: Watch Your Spending Posted on August 15, 2012 Leave a Comment Now that you have a budget down on paper, it is easy to see where your money goes.  It will now be easier for you to spot areas where you […]

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