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Budgeting can be a difficult thing to do sometimes. For people who’ve never had to budget, trying to plan out money can be quite daunting. To try and help, we’ve put together a guide on what you need to do in order to be able to make a budget.
Calculate your expenses
One of the first things that you need to do in order to create a budget is to figure out exactly how much you spend each month. This is essential for knowing how much you need to put aside for bills, food, and other things. Without knowing your expenses, creating a budget can be quite difficult.
Establish how much you earn
The next thing you’ll need to do is work out how much you make on a monthly, and then yearly basis. Now, most people will know the annual income they’re on, so the only bit you’ll probably need to figure out is the monthly income. This will show you how much money you have to be able to budget with, and it should hopefully marry up with your expenses. If this figure is less than the expenses, you may wish to consider making changes to your lifestyle.
Overall, these are the first couple of things you’re going to need to do in order to create a budget. We appreciate that a comprehensive list may be helpful, so there’ll be a second part to this coming soon. For now, it’s important to realise that knowing your own expenses, and also knowing how much you actually have coming in is critical to ensuring you make a successful budget. Your expenses should in an ideal world be lower than your income so that you can put some money away for emergencies and savings but don’t worry if this is not the case.