First Step: Track Your Expenses and Make a Budget

Step 1: Track your expenses

The first step to make a budget is to track your expenses and come up with a realistic amount for your budget. Track where you spend and make categories like Eating out, gas, entertainment (i.e. movies etc). I prefer making worksheets in Excel and I track my expenses daily. If you only use credit cards and cash only in rare cases then you can sign on to your credit card website either once a week or daily and record all your expenses and see where you stand.

I was spending close to $1000 and most of it was for dining out and entertainment. This month I have created a budget of only $500 which might seem drastically low but it really isn't. (I SPEND A LOT ON FOOD AND I NEED TO STOP THAT!!) This amount includes all my expenses that I have. All the savings goes into a high yield savings account and a monthly contribution to a Roth IRA. I will share my choices with you later on these subjects.

Here is a sample Budget for September

If anyone needs the excel file I use for my budget please email me and I will send you a copy. (It is a very simple basic template).