Budgeting in 4 easy steps
If you’re like most people, budgeting probably isn’t your favorite thing to do. But if you want to get your finances under control, it’s a necessary evil. The good news is that creating a budget doesn’t have to be complicated. In fact, you can do it in just a few simple steps.
1. Determine your income. This is the easy part. Just take a look at your pay stubs or bank statements to find out how much money you bring in each month.
2. Track your spending. For a month or two, write down everything you spend money on. This will help you get a better idea of where your money goes and where you can cut back. This will seem tedious, but if you do not know where your money is going, how are you going to know how much to put in your budget categories/
3. Set up a budget. Once you know your income and spending, you can start to put together a budget. Decide how much you need to spend on essentials like housing, food, and transportation. Then, factor in other expenses like debt payments, savings, and entertainment. This can be as simple as getting a notepad and writing your expenses down in order of priority and going from there.
4. Stick to your budget. The hardest part of budgeting is actually following through with it. But if you’re determined to get your finances under control, you can do it! Track your spending and make adjustments to your budget as needed. You will probably get your numbers wrong the first few months. You might underestimate how much you really spend on food or have an unexpected expense, but you can just adjust as you need to. The important part is to keep up your tracking and be honest with yourself.
There are a lot of apps out there that can help you with budgeting, but do not over complicate it. You just need to make sure you are doing with your money what you said you were going to do.