Budget Priorities First To Last – Most budgets revolve around three main priorities: food, housing, and transportation. After you set money aside for those expenses, which will probably account for half to two-thirds of your income, then you have to factor in any debt payments and decide how to prioritize from first to last. A sample of these of these expenses can be savings, household expenses and entertainment.
Once you decide you need to buy a specific item — a new computer, for example, or a backpack — give yourself a specific time limit to make the purchase, such as a half-hour.
Budgeting for the year is better largely because we feel less confident in our monthly estimates, so add more of a buffer for unexpected expenses.
Set money aside for leisure. Research shows that people get the most pleasure out of spending on leisure activities, such as vacations, movie theater tickets, and hobbies, partly because these things usually involve spending time with other people. Don’t forget to reserve some cash for such happiness-inducing pleasures.
A quick review of where you went wrong — and right — over the past few months will help pinpoint your weaknesses. Did you end up spending twice as much as usual on plane tickets because you waited too long to buy them? Or did you buy overly expensive gifts?
Don’t just beat yourself up; consider the good decisions you made, too, whether it was comparing prices before buying a new television or cooking more homemade meals.
The last step in your task of priorities is to write down every single thing you spend money on for two weeks, along with notes on why and how it made you feel. You might be surprised to discover the real leaks in your budget. Instead of lunches out and cab rides, you might be wasting money on coffee and happy hours.