Many people have no interest in money management, let alone budgeting. I recently had a conversation with someone in his late 40s who still cannot force himself to budget, so his family suffers predictable and painful financial struggles.
Whatever your average monthly income may be, divide that number by weeks or days to put it into some manageable perspective.
First, determine how much of your income is available each month after you pay necessary fixed costs like rent and utilities. This leftover amount is what you can spend on variable expenses, such as food, clothing, maintenance, and repairs.
Second, select a percentage of money for savings. You’ll need to be setting aside 15% of your income for retirement, but you’ll also need a savings percentage for other savings goals: vehicle replacement, home repairs, vacations, college, and an emergency fund. Spend time to be thorough with your savings goals. This is because savings is the area that most people overlook and then start a downward spiral by putting these expenses on credit cards with high interest charges. By going over your savings goals, most people begin to recognize how far above their means that they’ve been living. Your housing and utility costs need to be low enough that you can afford to meet your savings goals.
Third, accumulate the amount of your monthly income as the “base amount” that you maintain in your checking account. This way, you can pay any normal bill whenever it arrives, avoid the stress of timing bills, and never have to face a shortage in your checking account or experience late fees. If you place bills on auto-pay then you can eliminate having to think about them; which can also reduce the burden of managing money.
A co-worker of mine grew up in a household that did not budget. Even though his father earned enough money, it was quickly frittered away. The last days of each week, his family went without food until payday, when they’d gorge themselves at dinner. My co-worker, as a successful middle-aged adult, still has emotional scars and odd food behavior from that early and repeated trauma. Do yourself and family a big favor by going through budgeting basics. Every bank offers assistance, software, and help, and libraries are filled with free books on the subject. Or, you could read my book, Financial Literacy, which outlines the steps.