Tips on Creating a Budget: Prioritizing Expenditures

In my first article in the Creating a Budget series, we talked about creating categories for your expenditures. Categories would consist of Groceries, Rent or Mortgage, Utilities, Insurance, and so on. Having these categories in place will allow you to see how much money you are spending a month on each item. Often, we do not know exactly what we are spending and most often than not, we are spending much more money that we had anticipated. We will look at prioritizing these categories in this article.

Once categories have been created, the next step in creating a budget is to determine how much money you desire to spend on each category for that specific month. Creating a budget is a really simple task. Within minutes and with a little brainstorming, you will be in control of your financial situation rather than it being in control of you. We all seem to dread the nauseating idea of creating a budget, so we procrastinate, putting off tomorrow what can be done today. Yet, in reality, putting together a budget is quite simple and does not take as much time as anticipated. Now, that your categories are created, add a column and decide how much money a month you feel is necessary to spend on each item. For example, you may choose to spend $300 a month on groceries for your family. The goal is to not exceed this amount budgeted for the entire month. Once you finish one category, go through the rest of the list until all have a budgeted amount for the month.