Budgeting is one of the most important things you can do to set yourself up for success. It can be intimidating to create a budget, but it doesn’t have to be! We put together an easy 5-step process for you to follow.
Step 1: Identify your income sources.
The first step in creating a budget is to identify all of your income sources. If you have multiple streams of income, be sure to add them all into your budget.
Step 2: Identify your expenses.
Just like with your income, it’s important to identify all of your expenses. Be sure that they’re in order of priority, so that you pay off the most important ones first (your rent or mortgage payment, food, etc.) and then work down the list from there.
Step 3: Find ways to save money on expenses.
Now that you know what all of your expenses are, you should try your best to find ways to save money on those expenses! This could mean switching cell phone providers if there’s a better deal out there, buying generic instead of name brand products at the grocery store, or making coffee at home instead of buying it every day from a coffee shop. Every dollar
The first step to creating a budget is to track your spending for at least one month. It is essential that you do not make any changes during this period of time. Be sure to write down all of your spending, even the little things. You will use this information to help build your budget.
After tracking your spending, determine how much money you have coming in each month. Next, list all of your expenses including rent/mortgage, car payment(s), insurance, utilities, credit cards and any other bills you may have.
Once you have determined where your money is going each month, subtract your total expenses from your total income. If the number is positive, you are spending less than you are earning and that’s great! If it is negative, it means you are spending more than you are making each month and you’ll want to figure out how to cut back on expenses or bring in more income so that the number is positive.
The next step in creating a budget is to determine what type of budget works best for you and your family. There are two basic types of budgets: the envelope system and zero-based budgeting.
When using the envelope method, you would put cash into envelopes for various expense categories such as groceries and gas
Creating a budget can be overwhelming, but it doesn’t have to be. Follow these steps to learn how to make a budget that works for you.
1. Figure out where your money is going
2. Set short-term and long-term goals
3. Make decisions about what matters most
4. Create a plan for spending and saving
5. Track your progress and adjust as necessary
When the term budget comes up, there are two different thoughts that come to mind: a) Oh crap, I don’t want to do that, or b) this could be cool.
Making a budget doesn’t have to be scary. In fact, making a budget will let you know exactly where you are spending your money. You can then mold your spending habits in a way that is comfortable for you and your family.
Here are five simple steps to get you started on creating your own budget:
1. Track Your Spending
First of all, you need to be able to see exactly where your money is going. This means tracking your spending for the next couple of weeks. The easiest way to do this is by using an app like Mint or Level Money. Or, if you prefer a good old-fashioned pen and paper method, go with that instead!
1. Track Your Spending
If you’re like most people, this is the hardest part of budgeting. But making a budget without knowing how much you spend is like trying to drive without having any idea of where you’re going.
2. Set Savings Goals
Once you know what your expenses are, it’s time to set savings goals for things like retirement and emergency funds. A good rule of thumb: Aim to put away 15% of your income for retirement, because that’s what most financial planners recommend.
3. Live Within Your Means
Once you have a solid picture of what you spend and save each month, it’s time to create a realistic budget you can stick with. The key: Don’t try to drastically change your lifestyle overnight, or you probably won’t stick with it for long. Instead, plan to make small changes over time — starting with steps 4 and 5 below.
4. Adjust Your Spending Habits
Start by looking at all the discretionary categories in your budget: entertainment, eating out, clothes and other non-essentials. Are there any places where you can cut back? If so, make those changes right away so they become part of your regular routine
1. List your income
2. List all of your expenses
3. Subtract your expenses from your income
4. Create a budget based on what’s left
5. Account for the unexpected
1.Write down your income and expenses.
2.Determine what you spend each month.
3.Decide on a budgeting method.
4.Create a budget.
5.Stick to it!