Questions & Answers

Questions & AnswersCan you give me some tips for creating a budget that will still allow me breathing room for things I enjoy doing?
Anonymous asked 7 years ago

Can you give me some tips for creating a budget that will still allow me breathing room for things I enjoy doing?

asked October 20, 2015 by Anonymous

1 Answers
Joe Torraca Staff answered 1 year ago

There are many different ways to build a budget, from using a notebook or spreadsheet to full-blown apps that connect to your bank accounts. Regardless of the method you use to budget, not everyone considers all the things they spend money on. People particularly tend to develop a budget without fun or entertainment included.

Neglecting entertainment or a passion you have can cause a lot of problems.

For one, sticking to the budget means you don’t get to do anything you love. Not sticking to the budget means you’re taking money away from another expense category.

The best solution is to build your entertainment or passions into your budget so that every expense is accounted for.

One method of budgeting is called zero-based budgeting, where the goal is to make your net income equal to the outgoing cash.

How to Create a Budget for Everyday Expenses

You can read about budgeting in many of our other posts. But in general, you must:

  1. Mark down your monthly income
  2. List EVERY item you spend money on during the month
  3. Break the expenses down into categories or group, including savings, mortgage or rent, insurance, cell phone, groceries, travel, clothing, and everything else you spend money on
  4. Add an entertainment category, to include eating out, going to the movies, and your passion projects or weekly fun events
  5. Next to each line item, mark down how much you spend on that expense for that month
  6. If your expenses go beyond your income, you need to move money around for non-fixed expenses

Oftentimes, people find that their expenses outweigh their income. At this point, it’s time to make such adjustments. You can consider getting another stream of income, reducing grocery or entertainment funds, or explore other avenues. You may even benefit from credit counselling so a professional can help you.

answered 1 year ago by Joe Torraca