Personal Budgeting: The Basics

When it comes to personal budgeting, it often seems like money has the ability to grow legs and run away from us before we even notice that it’s gone. The problem isn’t the money itself but rather our inability to spend it wisely with prioritized goals set in place. Budgeting doesn’t have to be a time consuming task, it can be much simpler if a proper routine for tracking your personal money is created. Here are five simple ways to track your personal money in a cost effective way.

1. Map Out Your Monthly Income

Before you get started on putting your personal budget together, take a moment to analyze your revenue streams – when is your money coming in? How much money are you being paid? Once you’ve established your monthly earnings, then you can start putting together a comprehensive budget.

2. Keep Track of Your Spending

Create a habit of writing down what you spend. Find a resource that works best for you like an excel document, a journal, or budgeting websites like It’s important to write everything down, even if it’s something as small as a cup of coffee, you’d be surprised how quickly it can add up.

3. Needs vs. Wants

Break your spending habits up into two different lists: needs and wants. Needs are things like rent, household bills, and credit card payments that are high priority items. Wants are things like your weekly coffee habit, buying a new sweater, or purchasing concert tickets. Remember to keep in mind the differentiation between needs and wants to avoid over spending.

4. Monitor Your Cash Flow

To calculate your cash flow each month, take your total income and subtract it from your total expenses. At the end of each month; you want to ensure your budget has a positive balance. If you end the month in a negative balance, you will have to revaluate and cut back on certain expenses to manage unnecessary spending habits.

5. Start Financial Goal Planning

Once you get the hang of tracking your expenses regularly, start mapping out personal financial goals you would like to achieve. Financial goals can be things like saving for a new car, planning a vacation, or paying off your credit card within a specific timeframe. To get in the habit of achieving these goals on time, think of them as expenses and put set amounts of money towards them each month.