Setting a budget often carries a negative connotation for people. How do you get someone to start thinking about making a budget? Lauren Greutman, author of the book The Recovering Spender, How to Live a Happy, Fulfilled, Debt-Free Life says to try and think more positively. She says to think of a budget as a fence or a safety net around your money. You can still have fun with your money as long as you stay within your budget.
In order to begin setting up a budget for yourself, sit down at the beginning of each month and set a budget for the month. Plan in advance what you will need to spend your money on. Look at all of your necessary bills first, then the rest of your bills. Give yourself some “play” money each month- money that is just for something fun, even if it’s only $5.00, so you don’t feel that you are being deprived. If it is your first time planning a budget, knowing how much to allocate to each area is important. One way to do this is to look at your past three months of spending and get an average of how much you spend on a monthly basis.
The first month of being on a budget is not to save any money, but to simply stay on budget. The next month, you can work on reducing your spending and beginning to save some money or pay off some debt.