Track your expenses

Published: 07th May 2011
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The best way to get started with budgeting is to put together a very basic list of your monthly income and expenses. Just give it your best guess. Stick to listing things - rent, car payment, insurance, utilities and the like. As time goes by you can add more detail. Calculate how much you can spend, post tax.



If you have more sources of income other than a clear-cut salary that you use for expenses each month (i.e. interest income, insurance, other), you will want to include these sources as well.



Coming next to expenses. This will be the difficult part. It will be more difficult than income sources because you will have many more expenses than incomes. You will also most likely have hidden expenses or expenses you currently do not realize exist. Group these expenses into categories as best you can -- you can always re-categorize later.



Then go on to recording revenues and expenses in a month. You need to match all your revenues for one month against all your expenses.

Move on to establishing estimates for monthly expenses. Make your best guess for some those items that are not reoccurring. It may take you a couple of months to get good at guess estimating the more difficult expense categories. If you find you have a large amount of money in any one category, consider breaking it down into more detail. Break Utilities into Electricity, Gas and Water/Sewer.



And yes, track your actual expenses. You need to keep track of your actual expenses incurred during the month and group them into these categories. It will be easy for things like rent, phone where you can write out a cheque or make online payments. The tough part will be those cash expenses (lunches, sodas, socializing, movies, etc.). It would help to carry a small pocket size note book with you and write them down as they are incurred.



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