If you need to look at what you want to have in your lifestyle and how much that is going to cost you then use a simple method to help. You will only have a certain amount of revenue coming into your household so it is important to consider what bills you need to pay and if you want to have a savings plan as well. If you want to learn how to budget your lifestyle then follow these steps.
Identify how much money is coming in
Usually, the primary source of income will be through wages. Your wage will tend to stay much the same unless you do shift work or overtime hours but you will still probably have a good idea of how much you have coming in. This should be your income after tax as you are looking at what you are able to spend.
Identify what property payments or loan repayments you have
You will be paying for your property if you are renting or buying and there might be mortgage insurance as well. You may have car loans or a boat loan. If you have credit card debt that you are making regular payments for then this will be included. Be careful of credit card debts as the interest rate can be crippling.
Identify what household costs you have
There are your standard household costs which will include your utility bills. You need to have food and clothing. There will be transport coats. You could be paying insurance and health bills. Chances are you have communication costs as well. If you have children there could be childcare and education costs to cover.
Identify what lifestyle costs you have
These are the things that you like to have in your life but you know they are not absolutely necessary. You should assess how many times you have take-out food and how much it costs you. If you go the gym there are gym fees. If you have a drink or two then that adds up. What about going to the movies? Do you buy coffee during the day or snacks? Then add them to your list.
Consider where you can cut back
You might be able to learn how to eat well for less and cut back on food that is being thrown out. You might choose to enjoy fewer take-out meals. Perhaps you could be willing to find ways to exercise for free and save on those gym fees. Should you take lunch to work and stop buying those coffees? You will find there are many areas where you could cut back but you also need to be certain about what you think is important and the reasons why it should remain in the budget.
Once you are clear about what you have in your budget and what you consider to be necessary lifestyle costs, then you should be able to identify if there are any potential savings. If you are making decisions to alter where you spend, and possibly reduce spending, then you will need a plan. If you are properly prepared then you will be able to make the change more effectively and not be tempted to fall back into old lifestyle habits. Having clear goals will give you something to aim for and having a reward for yourself once you have achieved your goals will be a great incentive to keep on trying into the future.
