How  to  Establish A  Monthly  Budget

In today’s working class, which is practically every able-bodied adult, everyone wants to earn, save, or invest enough money to do more than simply, ‘get-by’, right?  The plague of this never-ending cycle otherwise known as ‘paying bills’, never seems to loosen its grip upon the people of the United States.  The U.S economy has stumbled since 2008, when the current recession began; making it more difficult for the working class to earn a living and provide for their families.  Statistics and reports have shown a steady increase in unemployment rates across the country, corporate downsizing, layoffs, and overseas outsourcing, and as of June 2014, the National Deficit was a reported $17.6 trillion dollars!

Despite popular belief, the U.S. has not recovered from the recession; little progress has been made to be quite honest.  Because of a dilapidated economy, many people have resorted to alternative means of supplementing their income, unfortunately, these means only places them farther into debt.  Reluctantly, many people chosen to ‘cash-out’ their 401Ks as an alternative source of income, sadly, this is only a temporary solution that consumes all retirement savings.  Others have taken out repeated payday and title loans, whose interest rates are astronomical as Wikipedia explains how a $100 14-day loan can have an interest rate anywhere from 391% to 3733%!  There are also heavy repercussions for defaulting on a payday or title loan; it can severely damage your credit, you can be legally sued in a court of law, and you could even lose your car.

With the economic status as defunct as it is, many working class Americans, the middle-class more specifically, have realized now, more than ever, the importance and necessity of budgeting and adapting to ‘get-by’ with ‘less’.  For some reason, the word ‘budget’ and/or ‘budgeting’, causing a lot of people to cringe.  Why?  Because when you budget, you have to place financial restrictions upon yourself, you have to differentiate ‘wants’ from ‘needs’, and you can no longer indulge or splurge on those wants—and the truth is, no one likes the thought of having to do that, and no one wants to do that.  So now the question is; how do you create a monthly budget?

Find  Motivation  to  Budget

Well, first of all, you start by getting yourself in the mindset of doing the things mentioned in the last paragraph.  Find a source of motivation; maybe you’re trying to buy a new house or car, or maybe you know your kids are depending on you to provide for them—whatever it is, find a reason to get and stay motivated and self-disciplined.  If you know why, you've decided to start budgeting, and if you have a specific goal as the end result, you’re more likely to see it through and be successful.

Why  A  Monthly  Budget?

The reason for budgeting on a monthly scale is because that’s how 90% or more of the working class operates, society itself actually; on a month-to-month basis.  Think about it; you pay bills monthly, your job pays twice per month, businesses calculate their annual profit and loss by monthly totals—this is simply the way America functions, we’re a ‘monthly’ country.  Therefore, you need to be able maintain month-to-month.

Set  Your  Goals

Although a goal can be a source of motivation, it is not the same as motivation.  Your motivation is your ‘driving-force’, so-to-speak, your ‘goal’, is what you’re actually working to accomplish and achieve by budgeting.  It’s a good practice to set long-term and short-term goals.  An example of a short-term goal would be buying that new car, or a late model used car, in one year.  Always remember you can modify your goals as needed, and you should always know ‘why’ you’re working towards a goal, and lastly, your goals are always priority.

Be  Aware  of  Your  Income

Before you can create a budget, you have to know how much money or income will be available to you each month.  The best way to get that amount is to base your budget upon your Net Income.  Your net income is essentially the amount of your paycheck after taxes and deductions.  Once you have that figure, you can then begin planning your budget.

Planning  Your  Budget

Split your net income between ‘fixed expenses’, such as a monthly car payment, and ‘variable expenses’ such as grocery shopping totals, which may vary.  Monitor these expenses to determine what adjustments can or should be made, and what works best for you.  It’s always a good idea to maintain some type of savings in cases of emergency.

Track,  Track,  &  Track

Always track your spending.  This can be a major headache, a migraine actually, but there are plenty of software programs to assist you in accomplishing this.  Most Android and iPhones even have apps that can help you as well.  And if all else fails, simply hold on to your receipts.

Customizing  Your  Budget

Budgeting doesn't have to viewed as a punishment, there are perks to it, afterall, it is ‘your’ budget, so tailor it to your measurements until it fits ‘you’, that is, unless you’re the husband, then ‘she’ sets the rules.  Keep in mind, you can only customize the ‘variable expenses’ portion of your budget—the ‘fixed expenses’ are labeled that for a reason.  An example is; maybe you cut back on dining out and going to the movies so you’ll have extra cash for the new HD flat screen TV—do what works best for you.