The first step in making a budget is to ask yourself, "What do I want to do with my money?" and the next question is "When do I think I'll have enough money to do what I want?"
Sam wants to go to the movies this weekend, buy a new school book, buy some ice cream for lunch, and get a new bike as soon as he can.
Sam knows he doesn't have enough money for everything he wants right away, so he breaks what he wants into two categories...
| What do I have to have? | What do I sort of want? |
|---|
A new school book
| to go to the movies |
| A new bike | buy ice cream with lunch |
Sam needs the school book, or he'll never learn, and he really…really…really wants a new bike. He wants to go to the movies this weekend with his friends, but he wants the bike more. He always has ice cream with lunch, but he knows that he doesn't really need it.
The next thing Sam asked himself was, "How much do the things I want cost?"
| What do I have to have? | What do I sort of want? |
|---|
| A new school book
$25 | to go to the movies
$9 |
| A new bike
$9 | buy ice cream with lunch
$3 |
Sam knew he didn't have enough money for everything, so being very bright he decided to continue making his budget.
Can you set goals for yourself? Do you think you can reach your goals? (Remember most things cost money, the more money the thing costs, the longer it will take to reach your goals)
Make a list of your goals, and then separate it out into what you need and what you want.
Continue on to Step 2:
Determine your weekly income and expenses