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It might seem that developing a budget should be an elementary task. But many people are simply not inclined to use spreadsheets, balance checkbooks or lay out a formal budget. Whether by nature, or as a result of a reaction to public school mathematics training, some people just aren’t ‘number people’.

Even if a person is not good at budgeting, the benefits make it worth the effort, even if it requires getting outside help. A good budget accounts for monthly income and expenditures, and anticipated changes in these. It is also important to plan for unanticipated changes.

A spreadsheet can be helpful and can be easily obtained free of charge. However, if this approach is intimidating, pen and paper will work just as well.

Whether you are using a spreadsheet or a notepad, here is an easy method to follow: Separate your page into two columns, one for income and one for expenditures. Expenditures should include regular monthly bills, amounts spent on food, transportation and other routine expenses. If possible, include an extra 10% for miscellaneous expenses that you could not anticipate.

Now, for an important add-on task that too few undertake: project different scenarios. Make another budget (an imaginary one) that shows monthly costs, income and the difference between the two… except:

Your expenditures column will not include any loans or credit card payments that you hope to eliminate. Also this budget will show a reduced amount allotted for purchases made on a whim. The total of these excluded items is a good representation of the amount you could potentially save each month.

Possibly non-essential expenses make up only a small portion of your total expenditures. However, even if the total is a minimum 10% by eliminating them you can notably increase your available income.

Of course, reducing the amount you allow for non-essentials will require some sacrifice. Only you can decide if it is worth the effort to save for an item rather than charging it and paying interest. However the savings on interest charges makes it worth considering. Even a relatively small credit purchase can accrue interest of $100.00 or more in one year and even more if only minimum payments are made. Having an extra $100 in your pocket may make it worthwhile to consider paying cash.

Your spending habits are your decision. Having a good budget will help you decide how to use your income wisely.