Creating a post-grad budget is probably not the most exciting thing you'll ever do, but it will benefit you in more ways than one. Budgets help save for fun things like vacations, and weekend trips to amusement parks with the girls, but also make monthly bill-paying more simple. Saving for graduate degrees or other career goals and your retirement is easier when it's built into the budget as well. Make a real budget with these helpful tips. With the right planning you can do all the things you want to do, even during leaner times.
1. Get Realistic
Start by outlining your real expenses and forget about estimating. Open up your online banking account or grab your latest bank statement and look at where you really spend money. Don't make the mistake of guessing how much you spend on things like food and gas, for instance, because you'll more than likely end up with an unrealistic figure. Be exact so your budget will be more effective.
2. Categorize Each Transaction
Place each charge into a group. Mortgage payments go under home expenses along with utilities, gas, water and sewer bills. Credit card bills and any other monthly, recurring charges should go into their own class as well. Never place recurring charges with non-recurring charges.
Put charges for eating out, gas, food items, even small miscellaneous expenses you don't pay every month into their own category. This helps you see just where your money goes and makes cutting expenses easier.
3. Add It All up
Once you've categorized everything, it's time to start tallying your expenses. Add up your fixed expenses first and write the tally. Next, add up your non-recurring charges for each class and note that number. This includes things like food, special entertainment expenses, and eating out, among other things. Compare the amounts and see where you are spending the most. This helps outline the budget.
4. Trim Monthly Costs
Cut recurring expenses anywhere you can. Refinance your car if possible, and pay down credit card balances. Find cheaper car or home insurance to slash costs. Once you lower all your monthly expenses, you can make a budget for yourself based on what you are left with each month.
5. Make Simple Changes
Trim away or reduce expenses in areas you can afford to live without like going to the movies, or eating out at restaurants. Watch other sneaky problem areas like convenience store purchases. You can save lots of money by bottling your own water for lunch, making your lunch, and renting DVDs instead of going to the movies. See how much this will save you before you choose a budget for each class of expenses.
6. Set a Goal
Try to have a goal in mind when doing a budget, it often helps when saving. When you first start budgeting it doesn’t have to be anything huge. Maybe something small like a new pair of shoes or a new stereo set. As you get better at budgeting, start to save for more expensive items such as a new laptop or a trip somewhere you always wanted to go.
7. Start the Budget
Create your budget by assigning a dollar amount for each class of non-recurring expenses for the month. Give yourself a dollar amount. You can spend $20 on Cosmos per weekend, for example.
Following this budget helps you save and make the most of your income. Do you work to a budget or are you left wondering each month where all your money goes?