How to budget in 6 simple steps - Step 2
A budget is a plan you make to spend your money. Budgeting stops you overspending, helps you save to reach your financial goals and, contrary to popular opinion, actually gives you the freedom to spend money on the fun stuff!
The process is quite straightforward and requires you to sit down at the end of every month to budget for the month ahead. It may take a few months to understand the process fully but after that, it's a cinch.
In this 6-part series, you'll learn how to create a zero-based budget and these six steps you need to follow to budget on a monthly basis:
1 | Manage your bills with a Bill Register
2 | Record your income on an Income Tracker
3 | Reduce your debt with a Debt Tracker
4 | Save money with a Savings Tracker
5 | Create a Monthly Budget
6 | Track your spending with a Monthly Expenses Tracker
Yesterday we covered step number one with the Bill Register. Today is step number two with the Income Tracker.
Step 2 | Income Tracker
Tracking your income is particularly important if you have irregular income but even if your income is fairly regular, tracking it is still a very important part of your budget process. It determines how much you can spend and when.
You can use the Lorna Leigh Lane Income Tracker for this or just apiece of paper. You may want to record your income from the last 12 months in order to forecast your income for the next 12 months, in which case print out more than one Income Tracker.
Under INCOME, write what the income is for such as the name of your full-time job, any second jobs you may have, side businesses, tax returns, investment earnings, government assistance etc.
Then write the after-tax amount you earned in the column of the month you received it and calculate the totals at the bottom. Make sure you include every single bit of income you have been paid. Scanning through your bank statements is a good way to make sure you pick up on all income you've received.
Now you have an income amount to work with when creating your monthly budget.
Budgeting is easiest with templates that you can re-use each month so you can get into good financial habits.
The Lorna Leigh Lane Home Budget Ultimate Planner Kit contains an Income Tracker and plenty more editable templates including pages to create monthly budgets and track your spending as well as debt repayments and savings tracking pages.
To get your Home Budget Ultimate Planner Kit click the button below below and give zero-based budgeting a try.
Read on here for Step 3 | Debt Tracker.