With great financial responsibility, comes great financial planning. Which is why having a budget is so important with keeping track of your money. A budget helps you plan how to spend your money, such as to plan ahead for anything big coming up.
But where does one start with making a budget, let alone sticking to it? We have a few tips to get you started and ways to keep your budget alive and well.
The first step is to track your expenses. Take a look over the next few months about where you’re spending your money. You’ll also want to know exactly how much income you earn each month. Generally you want your monthly expenses to amount to less than your take-home pay.
Know Your Goals
Once you’ve figured out how much you earn and how much you spend every month, take time to plan for some goals. Whether you want to pay off student loans, save a certain amount or take a vacation, having a goal will help you stick to your budget. These goals will motivate you to keep a close eye on your money and change your spending habits if necessary.
Find a Plan
There are different budget plans and ways to spend and save your money, depending on your financial goals, expenses and more. A common plan is the 50-20-30 budget. In short, 50 percent of monthly income is for needs, such as rent, groceries and minimum credit card payments; 20 percent for savings and extra debt repayments; and 30 percent for wants, such as traveling and dining out.
This is simply one plan to follow but you should do some research and consider your needs and financial situation before committing to one.
Hustle on the Side
While it’s easy to focus on the amount you’re spending, don’t forget about the amount of money you’re generating. It may seem fixed but you can find ways to increase your monthly income. Are you able to work out a raise at work? Have clothes you can sell for consignment? Is there freelance work or a part-time job you can do as a side hustle? There are plenty of easy ways to make some extra money.
Hopefully these tips help for planning your budget. Be sure to let us know what helps you save money!