How To Create Your First Budget In 4 Simple Steps

 Creating a budget is one of the best things you can do to get your financial life in order. Budgeting is about making intelligent choices and not horrible sacrifices. 

Step 1: Calculate your income

• First step in creating a budget is determining how much money you take home each month
• Your budget starts with your spendable income which is the money you receive after taxes and other statutory deductions

Step 2: Break down your expenses into categories

• Time to think about where you spend your money. There are three types of expenses in a budget which are Fixed Expenses, Periodic Expenses and Variable Expenses

Step 3: Figure your monthly cost for each expense

• Most of these expenses like rent or EMI will be fixed, meaning the same every month. 
• For variable expenses you can average them over the last few months, then use that number for your budgeted amount

Step 4: Compare income to expenses

• Subtract your expenses from your income. Hopefully your net income exceeds your expenses, if not make adjustments.

Track your expenses daily or every time you spend money. Don't just do it once a month.

Use envelope method which will help you stick to your plan. 

• Make an envelope for each of your budget categories
• Put whatever amount you've budgeted into the appropriate envelope
• When the envelope is empty you're done spending on that category for the month