Basic Budgeting is actually a very simple process.
There are only 4 steps to creating a basic budget:
1. Estimate your income for the next period (usually a month).
2. Estimate your expenses for the same period.
3. If your estimated income is more than your estimated expenses, you’re okay but you have to decide what to do with the extra cash.
4. If your estimated expenses are more than your estimated income, you have a problem that you need to take steps to solve.
If you have a very simple budget, it can be done on a pad of paper. Very simple means only a couple of income item and maybe up to ten expenses. For many people, this is the case.
A more complicated budget should be done on a paper spreadsheet or using some budgeting software.
The Money Action Plan supplies the software to do this.
Remember, these are just the basic steps. The Money Action Plan system will introduce you to more details and the money management processes.