It's a lot easier to budget when you have actual money to budget with. Take this simple approach to help keep a little more in your wallet.
Step 1. Assess your financial situation.
Track how the money comes in and how it goes out.
|Common Ways Money Comes In||Common Ways Money Goes Out|
Step 2. Identify needs vs. wants.
Take a look at what you have or want and determine what you can't live without. As hard as it is, you may need to give some things up.
Step 3. Understand your financial behaviors.
Only by identifying your spending habits can you find budgeting strategies that work for you.
|Financial Behavior||Budgeting Strategy|
Step 4. Create your budget.
Creating a budget is nothing more than simple math. Once you deduct your expenses from your income, you'll know how much you have left to spend on your "wants."
– 30% of monthly income (for taxes and other deductions)
– Monthly expenses (including savings)
= Spending money
- The bottom line: Don't spend more than you make.
- At first, you may find it intimidating to create a budget. But it will become easier when you see the benefits.