Creating a budget can often become a stressful matter and you would rather give up. Your financial security and stability is one of the most important things you need to think about, and creating budgets is one step to achieve that. Instead of creating a monthly budget, which can be more difficult, you should think about creating a weekly budget. In order to develop the habit of creating a budget, you need to start with small, but smart steps. If you are the type of person that spends more than planned, then splitting your expenses in weekly budgets can be very helpful.
The first step is to understand the process
If you understand the budget process, then you are almost there. Consider your income and your expenses as the two basic factors. Keep up with these two factors in order to create a smart weekly budget.
Do you know what your income is?
The main secret to achieving financial security is to know your income. This way, you can spend less than you make and avoid getting into debts. So, calculate your monthly income by using special software or by dividing your yearly income by 12. If you have a fixed salary, then it is easy to know your monthly income, but if you don`t, then you must carefully follow this step.
What are your expenses?
Knowing all your expenses is as important as knowing your income. If you are les organized, personal finance software may help you keep track of all your expenses. You should include here expenses such as rent, loans, bills, personal spending, etc. Eating out is also an expense, so do not leave anything behind.
Break your expenses into weekly ones
Keep track on how much you spend every week, by observing which the items you spend the most on are, and which are the unnecessary things you can remove from the list. Take in things like transportation cost, groceries, the morning latte, etc. After that, keep track of your bills and see how many bills you can pay in the course of one week. If you stay organized, your money will be spent wisely and you will end up financial secure.
Divide and conquer
In order to make things simple, multiply your monthly income by 12 to find out your annual earnings, and then divide it by 52 to see which the sum you can spend every week is. Pay the most important bills and expenses first, and cut down the unnecessary things you cannot afford for now.