Topic: The steps to follow in creating a budget - page 5. (Read 608 times)

Living in an era like this, we really have to make a budget where everything we buy is expensive, starting from vehicles, gadgets, houses and so on. Plus one of the few advantages is that it has weathered the Great Recession.

All the suggestions you give are good and must be applied in everyday life. Reduce unnecessary expenses, increase your savings by investing in the crypto market and don't sell.. One thing I know for sure is that diversifying your income can help protect you from a lot of the craziness going on in the world.

If you want to be happy in life, everything must follow the rules. If a person moves outside the rules or spends money, he will have to face many problems at some point. For example, due to spending extra money, he may run out of money at some point or even bigger.  If we can follow the rules then we can organize our life very nicely. There are some people who spend extra without accounting for anything they have to face a lot of problems. If we try to calculate them  If I do, I don't think there will be any problem.

This is a completely logical approach.

I think this is the most important factor determining the type and method of creating a budget. On this basis, I would like to delve a little deeper into this point, considering that the size of income versus the size of expenditures can determine the size of the budget that can be created at a given time. This requires a basic condition, which is the presence of surplus income to enter into saving (according to a precise plan) and the size of the budget that can be obtained be clear.
This leads us to consider that the more revenues exceed expenses, the easier it becomes to plan to create a budget. It becomes easier if we adopt what investors call “diversifying sources of income,” because often someone who has one source of income (even if it is fixed) cannot balance it with expenses in order to be able to develop a plan to create a budget.

I agree with you mate. This will also help us to avoid overspending on something we don't really need. Mismanagement of our budget may lead to financial instability. The best thing to do here is to prioritize our needs instead of wants as we all know that most "wants" means liability.

A very useful post.  All of us should have an ideal budget plan before the start of the year.  All of us will benefit a lot if we follow these rules and plan our budget.  Before the budget plan, it is right to think about our income and expenses.  Uncontrolled travel expenses drag down our finances.  Planning is very important to manage life well.

A very correct approach!
A person must be able to manage his resources - from time to money, and this requires information and planning.
Without this, at best, you will not have enough of your previous salary while waiting for the future one. Costs for communal payments and other mandatory payments may simply leave a “hole in your pocket” at a certain point, although within a month your income covers your expenses. This is me about calendar planning of income/expenses
In a word - a very useful approach which, by the way, will most likely show that you are spending some part of your income, to put it mildly - irrationally

Marry Christmas and happy new year.
 It comes to me to share my knowledge with others, but I am sure some might know the steps in creating a budget, but it might be that they are not following it effectively. I hope if I share such knowledge, it will help a lot, especially in the season we are in now. I know that as we have already celebrated Christmas, we have spent much of our savings, which we are still going to spend more on when it comes to the New Year celebration, so I take this as a reason to share such information with others so others will not suffer, especially after all this celebration, so I will list and explain the steps in creating a budget.
 
The steps in the budget include

1. Determine your income: As the first step in creating a budget, you have to know your total income in terms of what you can afford. Do not write a budget that is more than your income and end up not achieving anything at the end because your income determines your budget, so let's take note of our income first. This income might include your weekly,monthly, or even yearly income, as well as side hustles and any other source of income.
 
2. Identify where your money is going: The second step in creating a budget is to track your expenses. This is also very important because, without knowing how you usually spend your money, you will end up writing a budget that you can’t even stick to. More over, expenses include housing, transportation, food, entertainment, gambling, and so on. When you have identified where your money is going, you can categorise it into groups. For instance, clothing, house rent fees, and others should all be in the category of housing. If that is done, you have definitely achieved your second step in creating a budget.
 
3. identify or set an achievable goal: This is the third step in creating a budget when you have identified your income, tracked your expenses, and categorised them. Why I say achievable goal is that you have to set a goal that you can achieve either long-term or short-term. For instance, you might save money in order to pay your debts, invest the money, or even pay for housing and any other expenses, such as buying valuable and usable items that won’t be a liability to you.
 
4. Start creating the budget or priorities for your expenses: This is the next step, for me. This is the step where you will start writing the budget. It is not that you won’t write those other steps I mentioned earlier; you will also write them, but this is the stage where you will allocate some amount of money to the categories that you have created at the second step, and you have to make sure that it aligns with your priorities. After allocating a certain amount of money to those categories, you should make sure that you keep some of it as emergency funds; it is also important.
 
5. Review the budget; in some cases, I mean monitoring, evaluation, or adjustment of the budget. This is like the final stage in creating a budget, although this stage is a continuous process because this stage never comes to an end unless you have purchased all that you have put in your budget to achieve this process, including regular adjustments as needed to accommodate and adjust your budget. This is done in case something comes up, such as the use of the emergency fund that you keep as a category for things like an increase in the price of what you intend to buy for medical expenses, which might be an emergency, and many others. In this step, you must track your budget very carefully and with caution to make sure you have achieved it.
 
The steps I have listed above are the ones I follow whenever I want to write a budget. You can change this step in many ways. For instance, a gambler can use it, but it will be more effective with the amount he needs for the gambling, and he should make sure he follows the track, so stick to the budget to avoid the source of unusual spending.