Making a budget is a process that is fairly simple and everyone will benefit from. Even those who do not have money management problems will still benefit from having a budget. There are two main steps in creating a budget. First, tracking your spending. Second, setting goals for your budget.


The first step may sound easy, however the tracking needs to be over a series of weeks or months. The person needs to know on average how much they spend on utilities, rent or mortgage, loans, credit card bills, groceries, and then extra expenses such as going out to restaurants or going to the movies. When these amounts are averaged out, the totals need to be subtracted from the total amount of income.


Then ask yourself a few questions: Is the amount of money spent greater than or less than the income coming in? What could be cut from the expenses to make there be a little extra money at the end of the month? Upon answering these questions, if you find that months are going by where you can't pay your bills because of extracurricular activities, then it is time to control your spending. Also, if a person finds that credit card debt is taking up a majority of their finances, they may want to look into credit card debt relief programs, or debt consolidation.


The next point after calculating all the expenses and income, you have to set goals. Is there a set amount of money that you would like to have in the checking account at the end of the month? Or is that a special purchase you are saving to get? Is there an amount you want to put in savings? These questions are vital to determining goals for yourself. It is important to set some type of goal, no matter if you believe you need one or not. And no goal is too small. If your goal is to put twenty dollars into savings at the end of every month that is better than nothing.


The reasons for developing goals are to teach discipline where finances are concerned. Plus, it never hurts to have a little extra money saved back in case of emergencies. After setting your goals and developing a budget, it is time to put it into practice. After every few months, sit down and reevaluate your budget and goals. Has anything changed? Should you be saving more money? Always make changes that must be made. In the end those who have a budget are happy with the results and seldom find themselves in a pinch, as so many others do.