If you are the average American income earner, you know the problem: Your expenditure does not jibe your regular income. So, you keep getting into more debt to offset the financial gap. This and other financial shortages mean that you are in snafus and need to re-strategize your spending habits so they match with your income.

Creating a simple budget can be a perfect way to start your financial management steps. While creating a budget can be a daunting task for you, the benefits that accrue when you organize your income in a budget cannot be over emphasized. Simple as it sounds, the real hurdle is not in creating a budget but lies in actual implementation of the created budget.

Creating a budget depends on three major facets

  • You current spending habit
  • Your long term financial objective against your spending habits
  • Does your spending habit match your written guidelines?

Here are a few guides on how to quickly create a budget you can follow:

You need a budget; It’s Basic

You don’t need a budget because someone said it’s a good idea, you need a budget because it is a necessity. If you want a budget to work for you, you have to convince yourself of the benefits that come with creating one lest you miss the point and it doesn’t work out for you. The most important part of creating a budget is to help you spend less than you earn. This helps you spend only within your income and save more. This way you don’t get into poor debt choices that will destroy your credit reputation and force you to seek credit repair. Generally, you need to have a long-term goal in mind when creating the budget.

Know how much you have

Calculate,any financial planner will tell you; you can’t budget for money you don’t have. This means that you cannot base your budget on unknown windfall gains like inheritance. On the other hand, it may not be a wise idea to use your basic salary as an initial sum when creating a budget.

Look at your salary when all monthly deductions in taxes, work benefits and other costs have been deducted. For example if you earn $8000 per month as basic salary, your budget expenditure should be around $3000 or lower. Just to be sure, do your math and come up with an exact figure.

Do not Drive yourself nuts; Be realistic

Creating a budget may push you to make too many assumptions on paper that you may not be willing to give up in the end. For instance do not pledge to let go, say, 70% of your entertainment spending – it won’t work. You may try cutting it in small adjustments of 5-10% and increasing the cut with every success. Huge cuts on your ordinary lifestyle habits will only impress on paper but may fail in the long haul.

Learn to Adjust; in Extreme Circumstances

Most first-time budget planners usually find themselves between a rock and a hard place when they realize later on that they had forgotten an important aspect in their list. Not to worry- it doesn’t mean that your budget did not work out. When this happens – as it is prone to happen more in the beginning-do not worry nor panic, go back to your plan and make necessary adjustments. You may have to drop a few things but, as you will notice, it will perfectly fit in the new adjustments. In extreme circumstances you can list your needs in a descending order, from the most basic needs towards luxuries and identify the ones to prioritize.

Tithe yourself; saving is Very Wise

Save when you are young to eat when you are old.
You cannot consume all your income and expect to grow wealthier with time. The secret to increasing your wealth and having a bigger credit score is to save more. Condition yourself not to spend more than 90% of your salary and save anything above 10 %. These savings often come in handy on a rainy day. This is especially important if you have long term financial goals that you are looking to fulfill.

Financial freedom is a long journey that requires lots of courage to start, begin today.