A guide on how-to create a budget
By Lucy Duchesne

Having a budget is important so you can keep your finances in order. It helps you know where your money is coming from and where it is going.

First you need to create a list of all the money that comes in. This should be your paycheck, any grants, any government cheques. If you are self-employed you need to list all of your take home income.

Secondly you need to create a list of all of your expenses. This includes your mortgage payment, your vehicle payment, auto insurance, utilities, groceries, clothing and entertainment. Basically everything you spend your money on.

Your expenses should be in two main categories. These are variable expenses and fixed expenses. Variable expenses are expenses that change every month.

Variable expenses are things like groceries, clothing, and entertainment. Fixed expenses are expenses that stay the same every month. Fixed expenses are things like mortgage payments, vehicle payments and auto insurance.

Now you need to decide what you are going to use to keep track of your budget. You can use a piece of paper, a spreadsheet or a simple software. Don't choose a difficult program. You don't want to spend your time learning financial software that is too complicated for you. You need to choose a simple program so you can concentrate on creating a budget. There are many free programs on the internet these days that you are bound to find the perfect one for you.

Now that you have decided on the type of tool you are using, you can continue creating your budget.

Putting your Budget Together

List all your income first. Next, you write down all your expenses. I like to list my fixed expenses before I list my variable expenses just because I know that I can play with my variable expenses later on. Now, you need to substract your expenses from your income. Your goal is to have your expenses be less then your income.

If your expenses are more then your income you have a problem and this is where it gets hard. Start with your variable expenses first. You can reduce them. For instance I am sure that you can buy one less piece of clothing a month or maybe you are buying too many groceries. If After reducing the variable expenses you are still spending too much money you need to explore your fixed expenses. One idea is to call your phone company and reduce your phone plan or you could also sell your car and buy a cheaper one.

If your expenses are still more then your income you could increase your income. Maybe you could get a part time job or maybe you can look for another full time job that pays more.

Every month you should take a look at your budget. Remember your main goal is to spend less then what you bringing in.