Budgeting - Starting from Scratch

As soon as you start spending your own money, it’s time to start tracking your spending so that you can create and follow a personal budget. 

Tracking your spending, while sometimes tedious, is the best way to find out exactly where your money is going.

The simplest way to track your spending, especially your cash, is the low-tech way, with a notebook and a pen. By carrying around the notebook with you, you can track exactly where every dollar is going–from a small coffee on your way to work to a spending splurge at the mall.

If you’d prefer, on a daily or weekly basis, you can transfer your handwritten notes to a computer spreadsheet.

Once you have collected information for about a month, you’ll have a good baseline of information to use to create your personal budget.

Some major categories that you’ll want to include are housing, utilities, insurance, food (groceries and dining out), gasoline, clothing, entertainment, and “other".

Using a spreadsheet program (such as Excel), online service, or other personal finance program, add up the expenses that you’ve been tracking, and then calculate what you’d like to budget for each category. Keep in mind that you’ll need to budget for some items, like gifts and automobile repairs, which will be necessary but won’t occur every month.


To read the rest of this money management article.

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