Creating a Budget: A Quick How-To Guide
February 2, 2016
Creating and sticking to a budget is one of the most important steps in getting your financial life back on track, but doing so can seem daunting and difficult.
That doesn’t have to be the case.
These simple tips can help you craft a budget that you can stick to.
- Know your numbers. The key to sticking with a budget is being honest with yourself about how much you’re spending and how much you’re earning. Start here. Take stock of how much you spend on bills and other expenses every month, and how much money you’re bringing in (also called your net income), then divide your expenses into two categories: fixed (such as mortgage and car payments) and variable (gas for your car, groceries, entertainment). Also include how much you’d like to save in an emergency fund. Every dollar should be accounted for, so saving receipts and pay stubs – either on your computer or phone or on paper – is very important.
- Set financial goals. After looking at the numbers, make a financial plan for yourself. Is your aim to pay off credit card debt? Build up a savings account? Start a retirement plan? Having a solid financial aim can help keep you and your budget on track.
- Track your spending and plan for next month. Keeping up with how much money you spend can be difficult, but it’s an important and necessary part of building and sticking to a budget. Consider an app, a spending journal, or other system that can show you where your money’s going each month. Also make sure to plan for the upcoming month. This can help prepare you for any potential surprises or emergencies. Check in with yourself each month to see where you’re at – compare your accounts to your budget and see where any adjustments might need to be made.
- Choose a strategy that works for you. Many websites offer printable budget templates that you can keep in a binder to make organizing your money easier. However, some people don’t like working with hard copies of paper, and would prefer to use a computer program, spreadsheet, or app to help them keep track. It doesn’t matter which method you choose as long as it’s one that works for you.
For more help on getting through difficult financial times, call the law offices of Attorney George R. Belche today for a free consultation.