Creating a budget is actually a simple process. Having a solid budget in place helps to ensure on-time payments. When you know what’s due, and what days you have money coming in, it makes it easier to pay your bills on time. Remember, payment history is the largest category of your credit score. That means above all else, payment history will be the largest contributor to gained or lost points. So let’s be sure to pay all bills on-time. That is why I am sharing with you how to create a budget in 30 minutes or less.

A majority of the clients I interact with, struggle to create budgets because they were never taught. Unfortunately, many school systems fail to properly teach financial management before we graduate and become young adults. A large portion of financial issues arises from living above our means and simply not understanding what we can truly afford.

Not having a budget can be extremely problematic and can damage your credit score significantly. Without a budget, it is highly likely that you will miss your payment due dates which have the greatest negative impact on your credit score.

If you are looking for a quick way to create an effective budget then keep reading below….

The 30-minute budget:

Step one of me teaching you how to create a budget in 30 minutes or less, you need to know 3 things:

-What money is coming in?
-The money that needs to go out?
-What day does the money need to go out?

Breaking your budget down into simple terms helps you to understand exactly what needs to happen. Once we know those 3 things we can create a plan of action.

Creating a budget plan of action. You will need to write out all of the following:

-All the money you have coming in for the month, including the day you are expecting that money
-The number of bills that need to be paid for the month
-The due dates for each bill
-How much you plan to save

There you go! You just made a budget in less than 30 minutes.

Another good way to budget is to break up your total into weighted categories represented by percentages. Dave Ramsey recommends:

• Giving — 10%
• Saving — 10%
• Food — 10% to 15%
• Utilities — 5% to 10%
• Housing costs — 25%
• Transportation — 10%
• Health — 5% to 10%
• Insurance — 10% to 25%
• Recreation — 5% to 10%
• Personal spending — 5% to 10%
• Miscellaneous — 5% to 10%

Budgeting isn’t rocket science. It just requires a little effort. Give it a try, you will be thankful later!

Keep up with Kai on her two blogs here and here. and come back next week for more finance tips.