The definition of a budget is basically based on estimate of itemized of expected income as well as expenses for a given period in the future. Many single parents are faced with financial difficulties when they are left to take care of their own children and they do not have much income that allows them to support their family in the lifestyle that they were used to.
Well if you are a single parent and have been faced with this dilemma don’t worry you can live on the small financial income you are able to get for now by following the below steps and adhering to them strictly.
· A Budget
Creating a budget helps you show all your sources of income, this will include job, child support, tips and even bonuses. The good thing with creating a budget is that you will now keep track of the finance coming in. so you need to gather your sources of income and list them and you will be surprised you could be making more than you claim to be making!
· List expenditures
It is important to list down expenditures so that you ensure you know how much you are spending on a monthly basis. The expenditure will cover cash, check and also credit card charges. All you are required to do is collect all your expenditure including periodic costs that you pay either quarterly or yearly.
You should go ahead and list your expenditures on the same page carrying your sources of income, add up them up and see whether you are going to be left with a positive number.
· Plan Formulation
This stage is where you sit down and create an action plan that will help you reduce and eliminate your debt. If your expenditure is higher than your income that is also an okay thing since now you will have the best time to create a plan that will help you achieve your quest.
You should categorize your list of expenditures so that you know how much money you spend on necessities. It is necessary you learn how to group your expenses by category, you should put your household items together, separate your car and various transformational modules in another category always ensure that you have a categories in savings, medical and entertainment.
After you have done so ensure that you have divided up your income across these categories and try to ensure that you never spend more money than you have in the category.