Budgeting 101: Five Things You Need to Start a Budget

For those of you who have read Simple Budget Blog and taken its advice, we thank you from the bottom of our expense records. It means that the columns we produce on a weekly basis have had some resonance in your life. And even if you haven’t created the perfect budget, at least you have given it a shot.

For those of you who have read Simple Budget Blog and not taken the advice, we wonder why. We’ve tried to make budgeting as simple a process as possible so you can control your expenses, pay down your debts, and become a financially responsible citizen of the planet. Heck, we’ve even refuted the many excuses people use to not create a budget. What else is needed?

Perhaps a list of five things needed to start a budget? Well, we can do that right now! Here are the five things you need in order to set up a new budget.

1. A place to record the budget.

This can be a software package like Quicken or Mint, a spreadsheet program like Excel, or a writing pad. In the end you want to find something that is easy for you to use and change. In order of difficulty, writing things down on a legal pad takes the most time, preparing calculations in a spreadsheet takes a bit of practice, and programs like Quicken do as much as you want them to do.

2. Your bills, receipts, and statements.

You budget can look gorgeous, but without anything to add it’s just a sheet of paper, real or virtual. The categories created on the budget need to be populated with generated income and expenses. This includes any bills, purchase receipts, and statements from banks and other financial institutions. The bills and receipts are added into the desired categories while the statements are used to reconcile said information.

3. A calculator.

The sad truth is retail shops don’t divide up purchase receipts to accommodate your budget’s categories. This is why a calculator, physical or the one that comes with your computer or smartphone, is a necessity. This allows you to divide up the amounts spent on groceries, household, clothing, etc. so they are properly represented in the budget.

4. Time.

This is probably the hardest thing to obtain when doing a budget due to our overstuffed schedules. Nevertheless, obtaining a square of time to record receipts and payments is absolutely necessary. It doesn’t have to be consecutive period several hours as long as you take a few minutes each day to record your expenses and plan a scheduled date to split regular payments into the budget categories.

5. Patience.

Your budget won’t be perfect the first time. It may takes weeks or months to fine tune categories and allocation of funds to each. The thing you need most is the patience to work with the budget to get it the way you want. It’ll pay off in the end as you gain a clearer picture of your financial universe and what you need to do in order to prosper.