How do I create a budget?
The easy way to start is with the big items. You know what your rent is going to be; it's fixed, or your mortgage payment is likely to be fixed. So, start with that. You may have a car payment, which might be a substantial payment. Incorporate that. Do a little bit of research into your own spending habits and see how much you spend at the supermarket, how much you spend for entertainment. These are your recurring expenses that you're going to have week, after week, after week. Also, don't forget that you have to plan for items that are non-recurring; things such as your automobile insurance or renter's or home insurance, which may only be paid once or twice a year. So, you have to make sure that you're planning for that as well. Additionally, you might want to plan to work into your budget such things as planning a vacation. You have to account for your vacation within the budget because if you're going to go on that vacation, but you didn't account for it in your overall spending plan, you're going to have to use credit to go on vacation and that's something you want to try to avoid. So, the entire goal is to enable you to make choices based upon the financial resources that you have from your earnings and from any investment income that you might have.
