How Do I Create a Budget?

What is budgeting?  My definition is that budgeting is an estimate of money to be earned and expenses to be paid over some given time period based on past period’s data. I like to think of budgeting as a diet; it is only effective if you use it.

Some tips to remember as you create your budget:

• Be as accurate as you can with your projections. If you have expenses that vary month to month (like electricity), then make sure you take the average of all months. Better yet, use the highest month as your budgeted amount to ensure that you are under-budget most months.
• Make sure you determine what you want versus what you need.  Include needs in your budget.  Include wants only if you have room in your budget – or create a savings expense within your budget to save for what you want.
• Under-estimate income, or if you are paid bi-weekly (every two weeks) then budget as if you only receive two (2) pay checks per month.
• Have a short-term and long-term goal for your budget.  What do you need in the short term?  What do you need in the long term? 
• Stay organized. The best way to maintain your budget is to keep records of income and expenses, and review those on a monthly basis.
• Reconcile your bank account monthly. Most people get into budget trouble by relying on their online bank balance and forgetting what checks are outstanding. Keeping a check register (online through Excel or Quickbooks, or on paper) will help you recall what checks are outstanding so there are no surprises.
• Review your budget monthly. Did you underestimate? Overestimate? Or accurately reflect your income and expenses.  A good time to do this is when you reconcile your bank accounts.
• Pay cash when possible instead of credit.  If you are trying to pay down credit card bills, the easiest way to do that is to stop using credit for smaller, every day purchases that you can include in your budget – like groceries and gas.
• Have a support / accountability partner.  Have someone you can trust (who won’t go blabbing about your finances).  Maybe your spouse or significant other?  Parent?  Sibling?  Attorney?  Financial Advisor?  Coach?

With a little discipline and some accountability, you can create an accurate budget that will allow you to accomplish your short term and long term financial goals.

For more information on budgeting or debt, please contact us to schedule a free initial consultation to discuss your options at 813-774-5737 or email me directly at shawn@yesnerlaw.com. You can also order Crushing Debt: 9 Strategies to Eliminate Financial Bullies on Amazon.com. Please also subscribe to the Crushing Debt Podcast, on Apple Podcasts, Spotify, and other podcast players, including Amazon Echo (“Alexa”) for more free information about these topics.

Shawn M. Yesner, Esq., is the host of the Crushing Debt Podcast and founder of Yesner Law, P.L., a Tampa-based boutique real estate and consumer law firm that helps clients eliminate the financial bullies in their lives. We assist clients with asset protection, the sale and purchase of real property, Chapter 7 liquidation, Chapter 13 reorganization, bankruptcy, foreclosure defense, debt settlement, landlord/tenant issues, short sales, and loan modifications in Tampa, Westchase, Odessa, Oldsmar, Palm Harbor, Clearwater, Pinellas Park, Largo, St. Petersburg, and throughout the greater Tampa Bay Area.