How to budget your money

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The ultimate goal of a budget is to understand where your hard earned money is spent and to create better cash flow.

With your checkbook in hand, you should be able to start categorizing your expenses. For example, how much did you spend in groceries last month, or gas for your car, or even those stops for coffee.

Take the list of bills and separate them by date due. If you are paid bi-weekly – take your first paycheck of the month and pay the bills that are due from the 15th until the end of the month. Use your second paycheck of the month to pay the bills from the 1st through the 15th of the next month. This makes it easier to manage your payments, make sure they are paid in time and give you better cash flow.

It’s up to you if you would like to use a spreadsheet to visualize your new budget. Whatever works for you. I sometimes have certain bills taken automatically from my checking account on payday.


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