Creating a budget doesn’t have to be confusing!

In fact, it can be a straightforward—and profoundly enlightening—exercise that reveals your available cash flow and where you can reduce spending.

Here’s your step by step guide to creating a simple budget!

Get a pen and paper (or laptop). You’ll need a place to write and crunch a few simple numbers. If you’re “old school”, a pen, piece of paper, and a calculator will work perfectly. But you can also use a text document or spreadsheet if you’d rather!

Also, consider using a budgeting app. They’re simple tools right on your phone that you can use to track your income and outgo.

Make a list of all your monthly expenses, including housing, utilities, groceries, and transportation. Then, log in to your online banking account. You should be able to determine your average monthly spending in all of your expense categories. Write down those numbers in your budget.

Add up how much you spend in each category. That’s your total average monthly spending!

Then, subtract that number from your income to calculate your average available cash flow. That’s how much money you have leftover each month to tackle debt, save for emergencies, or use to start building wealth.

If it’s a smaller number than you expected, it’s ok. You’ve taken a very important step to face reality and move forward financially! You now know what you’re spending each month, and on what. Look at categories like entertainment and dining out. Can you reduce your monthly spending in these areas?

If your budget is tight and cash still isn’t flowing as freely as you’d like, you may need to consider starting a side hustle or part-time business to help make up the difference.

Ask me if you need help constructing your budget. It’s a simple process that can seriously improve your financial wellness.