I know, I know. Many people hate the idea of budgeting, financial planning, and all that entails. I'm one of the odd people though that actually enjoys sitting down and figuring out a financial plan for the future. I find it satisfying to organize such things, plus it allows me the freedom of knowing what my finances look like: what, if any, "free money" I have to put toward random purchases, how much I'll have in savings by a certain date, etc. Budgeting is not something that just falls into place, but there are many helpful sites where you can learn more.
The first step in creating a budget that works is figuring out your current finances. What are your earnings? What are your necessary expenditures every week or every month? What extras do you spend money on that you could cut out if necessary? Once you have the basics established, then you can start your actual budgeting. This would include things like rent or mortgage, utilities, groceries, maybe a car payment, credit card payments, maybe a streaming service or membership fee at a local gym, and any other regular bills. And of course, in addition to expenses, you need to figure out what your income is for that same period. The most obvious is your salary, but you may have other forms of income you will need to record as well.
Once this groundwork is laid, it's a pretty simple step to subtract your expenses from your earnings. Then comes the fun part of planning out what to do with whatever is left over. I am a firm believer in putting something into savings every week (or every pay period). It may seem like an incredibly small amount, but that little bit adds up over time. Even if it is only $10 every week or two, putting that bit into a savings account will give you a little bit of a "safety net" for those rainy days.
Of course, it is also important to leave yourself a little bit of spending money. Maybe for a coffee on your way to work one morning, a meal out on a hurried evening, or for finding that amazing deal at the clothing store. That's the wonderful thing about a budget though. Instead of making a purchase and hoping it doesn't set you back financially for the next week, when you have a budget in place, you can know exactly how much leeway you have and whether or not it is a wise decision to make that purchase.
Making a budget may seem boring or unnecessary, but I speak from experience when I say that it can save you from a lot of financial frustration. I tend to enjoy letting myself spend a little too freely when on vacation or when out with my sisters, trying to treat them a little. It's been a hard lesson for me to learn that I need to stay within a strict budget most of the time, and then I can enjoy the little splurges here and there without guilt and without worry. As this article states, budgeting helps you focus your spending habits' it's not necessarily about limiting or restricting yourself.