Budgeting is a simple concept, but for beginners, it is one that will take a few months to master. The idea is simple. You figure out all of your income. And then you figure out all of your bills and expenses. You subtract your bills and expenses from your income, and what you have is your discretionary spending. Again, if you are new to this concept, it will take a few months to work everything out, but it is worth it.

Budgeting must be done before you get your income. I would do your budget on 26th of the month for the next month. This way, you aren’t trying to figure out what you have left after your money is disappearing. If all of your bills are the same every month, budgeting will be easier. However, if you have annual bills, you would need to set aside some money every month so that annual bill doesn’t hit you hard, and possibly cause an overdraft. For example, if you chosen Mint Mobile to be your cellular provider, and you pay the cheapest annual payment, that is $180/year (plus taxes). That could be $20/month you would want to save up for your cellular bill. Then right before you have to pay the bill, you deposit the money into your checking account. The cellular bill gets paid, and you got another year of service.

Most bills however are monthly, but again – if all of your bills are the same, this shouldn’t be an issue. The hard part will be expenses rather than your bills. This will include things you are charged for, but would have to get. Such examples will include food, clothing, hygiene items, and so on. You don’t receive a bill for these categories, but you still have to account for them. This is where most new budgeters gets tripped up over.