Insanely Simple 6-Step Method To Create Your First Budget
If you’ve never created a budget before, it can be a little scary…
It’s scary because you’re finally looking at your spending numbers and putting everything out there, and that’s not easy!
This is especially true if you have a lot of guilt around your spending habits and poor money management.
Note: This is not official financial advice. Please research and consult with a financial professional.
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Key Takeaways
Here are a few key takeaways:
Mark Down Your Past Spending
- Gather statements and receipts, and make a note on paper or a spreadsheet where you spend your money most.
Start Tracking Your Current Expenses
- Think in terms of “needs” and “wants”.
- Other types of expenses, like fixed and variable expenses, also need to be accounted for.
Subtract Your Spending From Income
- It’s vital that you know if you’re spending more than your income each month.
- Your main goal should be to spend less than you make every month.
Audit Your Expenses
- Examine your current expenses and determine what you can cut back on. Can you cancel subscriptions, gym memberships, and unused services?
- Once you understand areas where you don’t need to be spending, you can cut your monthly expense burden and put that money away for savings.
Establish Savings Goals
- Now that you’ve gotten your budget started, begin to determine what financial goals you would like to reach and create savings goals based on where you want to be in the future.
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