MikeFoden.com

Bills. We all have them, we all hate them. Being able to budget effectively helps gives us financial freedom in order to enjoy the rest of our lives.

A good way to start budgeting is by visualising how much of your income gets eaten up by bills. A great post by Matt over at Steadfast Finances talks about an exercise you can do using a calendar in order to get a better grasp at how your money is actually being used. I would recommend doing this exercise using February as the month you complete this on, as 28 days = 4 weeks = easiest time to do it.

As you can see, I have personally used this method to see how my pay is spent on my things. As you can see, half of my pay per month goes straight to bills. This means I can put aside some of my money into my special savings account, and then keep some aside for social outings.

By visualising what you spend, you can start to work out where you could be saving additional money. For me, I was spending over $200 a month just on lunches for work. By switching to home-made prepared lunches, I have additional money to add into my higher interest bank account (as well as being more healthy). In turn, that is an addition $2,400 a year I can save.

Try it, and see how you go.