Sadly, a lot of people misunderstand the notion of budgeting. There is an opinion that a budget can be an obstacle that will stop you in your actions. 

In fact, a budget doesn't limit your freedom—it gives you freedom! It is a plan for every banknote, every coin you have. Budgeting means you're spending with purpose before the month starts. It's not something unreal or magical, but it means more financial freedom and a life with much less stress. It's really all about being conscious of where your money goes.

The main aim of budgeting is not just making both ends meet but distributing the expenses correctly, so you don't have to borrow or live half-starved during the week before your salary. Many people even say they find "extra" money after creating a reasonable budget and sticking to it. 

First, you need to record all financial receipts to understand how much you have at your disposal. All sources of income should be taken into account: salary, bonus, part-time work, money from an apartment rent, and so on. With unstable earnings, it makes sense to form a budget when you know exactly what amount you have, for example, on your regular payday.

The next step is to consider your expenses. Write down all the essential items you cannot avoid spending money on. The list will approximately look like this:

  • Utility bills;

  • Food;

  • Transport fee;

  • Telephony, the Internet, etc.

Of course, this list won't be the same for each person. Once your actual needs are taken care of, you can fill in the rest of the categories in your budget. 

You can spend the rest of your money on entertainment, clothes and stuff like that. Also, you can allocate the remaining amount of money for the number of days in the month and spend it on small but pleasant things. All the magic of money management lies in the fact that great results are obtained from small daily actions, that is, from a lifestyle and habits. 

Three simple practices will help to integrate money management into the daily process:

  • Make regular money savings;

  • Plan a budget;

  • Keep records of your expenses.

To help you in this time-consuming task, we have created a budget planner sheet that you can download. It will help you to keep track of your expenses. Start with small but confident steps. Set your goals high, and don't stop till you get there. All the best!