Chapter 1 | What Do You Need to Create a Budget?
Creating a budget isn’t about having money; it’s about figuring out what you’ve got, what you’re spending it on, and how you can realize your dreams.
A Computer
One note of caution here: you’re going to be putting down in written form a lot of confidential information - Make sure your computer’s security systems are strong. If possible, create a password protection for your “Budget” folder so only you (or anyone else you authorize) can get into it.
The Right Software
You’re inaugurating an era of responsible spending, so you don’t want to purchase something that isn’t exactly what you want or need.
You can bypass all those bright, shiny programs and just do the work and construct the spreadsheets yourself; if you have a quality spreadsheet program such as Microsoft Excel, you’ll be in good shape.
Spending and Income Records
One goal you’re going to accomplish as you go through this book is keeping accurate and careful records of your expenses and income.
Assemble all your bills in one place, possibly in a folder or other container so you won’t lose any of them.
you can find expanding accordion folders, each slot marked with the name of the month. These are great for keeping bills, since you can file them as they come in based on when they’re due.
In a separate folder or box, keep your pay stub records. This applies whether you’re paid with physical checks or through direct deposit into your bank account. You need to see exactly what’s coming in and when you’re receiving it. Keep the stubs in the order in which you receive them. Also in this folder, keep stubs of any other checks you receive (tax returns, gifts, etc.) These records are essential both for budgeting and for tax purposes.
Most financial advisers recommend keeping your financial records for at least three years. This doesn’t need to be a huge burden; just make sure you keep them sorted and somewhere you can have easy access to them if you need them.
A Quiet Place to Work
Constructing a workable budget is something that takes concentration and hard thought.
Pick a time when you’re going to be alone. Find a place that’s comfortable and away from the tumult of your daily life.
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