Help Me Make A Budget
If you are considering a move to a more simple minimalist lifestyle then one of the most important steps is to figure out how to make a budget.
Choosing voluntary simplicity and minimalist living certainly may mean downsizing and paring down your possessions, but for a lot of us it certainly will also mean taking a long hard look at household finances and the level of debt you are carrying.
What Is A Budget?
Simply put a budget is the tracking of all money coming in versus all money going out. I would say that is does not take a rocket scientist to figure out that you need more coming in than leaving but that does not seem to be the case in a lot of households.
Why do we seem so reluctant to actually sit down with a sheet of paper and look t how to make a budget? I suspect that a lot of people are scared of what the results will be. I mean here you are in your 40’s or 50’s and you still have a pile of debt and not a lot of net worth.
Well yes that may be the case. But now you are committed to taking responsibilty for your actions. You know that in order to get on track with a more simple, sustainable and happy life this is the step that must be taken. It is not really simple. It takes discipline and it can be time consuming hard work. But you are going to do it.
How to Budget
The first thing that needs to happen is that you need to track your household spending for a full month. Every receipt must be kept and put in a zip lock bag or pouch. Write down every purchase in a small notepad.
Add up your expenditures at the end of every day. This will be very eye opening for a lot of people. A lot of you have no idea that you are spending 20 or 30 or 40 dollars a day on stuff. This will help you see it.
You probably have fixed expenses like housing costs and utilities so make sure that these expenses get factored in at the end of each month as well.
It should be fairly easy to come up with how much money is coming into your household. Get out your pay stubs or look online for the direct deposit information.
At the end of the month you subtract your total expenditures from your total income.
You should have a few pennies left over. This is a surplus. Good job.
What’s that? You don’t have money left over? Uh oh. This is a deficit. Now don’t panic. You are not alone, but you are now aware of the situation and now you can take a look at the areas where you spend the most money and see where you can start cutting back.
Again, I know that this is going seem like hard work, but it learning how to make a budget must be done to get on track with your new simple, minimalist living plan.
So what have I missed?
How does your household budget look?
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