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How To Track Your Finances Using A Budget

Odd Cents - Budgeting and Income

Many people hear the word “budget” and their minds immediately go to what the leader of a country or an organisation does periodically to see where money will be spent. To be honest, when I think of the word “budget”, I think of my little excel document that details how my salary will be allocated. It is a very simple document, but it’s worth is magnificent.

I’ve had my budget going since May 2008 and it has helped me tremendously. I had not intended to make a budget initially, but at the end of 2007, I made a New Year Resolution to put my spending habits in check. In January 2008, I started making a note of everything that I spent. And it was an eye opener.

I did this exercise for about four months before I started my budget in May 2008, which was also very simple. I simply listed my commitments in one column and the corresponding amount due to each.

And even now, three years later, the format has not changed. I continue to list my commitments in one column and the corresponding figures in the next column. These figures total to my monthly income. I do this on a monthly basis and I refer to it whenever I need to shift around stuff to squeeze in a much needed item.

I still make a list of everything that I spend and this works in conjunction with my budget. It allows me to analyse how much I’m spending each month, versus how much I budgeted.