A lot of budgeting advice makes it seem like a huge task: gather your bank records and credit card statements for the last twelve months, sort everything into categories, and then make a spending plan that balances. It’s a great way to get control over your money. It also might make you crazy.
Here’s a different idea. Take a sheet of notebook paper. Write down the amount of your 15 October 2014 take-home pay. Skip a line or two, and write down every bill due between payday and the end of the month. Subtract all that, and see how much is left over after you’ve paid all the bills. Now, write down where you plan to spend or save all the rest of the money. Continue until you are out of money. Shazaam! You’ve written a spending plan. This shouldn’t take more than ten or fifteen minutes.
As the next few weeks unfold, make notes if your spending is different from your plan. When it is getting closer to the next pay day, put this sheet away in a safe place and do the exact same thing again.
A couple of things will probably happen. First, you might notice that your bank balance is a little healthier. There is something about having a plan that almost always results in less spending. Second, after a few months, you will have a realistic idea of where you are actually spending, month after month. You can use this information to tweak your spending to your priorities.
If you’ve always given up on budgeting, or you’ve never tried to make a spending plan because it seems like such a big job, try it my way. And let me know the results!