Budgeting your money is a challenge.
It forces you to confront your spending habits and work to improve them.
If youre creating a budget for the first time, remember that budgets will vary by individual and family.
Its important to set up a budget thats a fit for YOU.
More on that later.
Lets start at the beginning.
Can You Survive 10 Days of Budgeting?
If it’s crucial that you wrangle your budget, it may be time to consider a savings challenge.
What Is a Budget?
A budget is a money plan showing your income and expenses.
A good budget includes saving money, no matter what your income level.
Thats how you get ahead and avoid living paycheck to paycheck.
Set a short-term or long-term goal.
It can be to pay off debts such as student loans, credit cards or a mortgage.
For example, creating a budget is a must for many people trying to buy their first home.
But it shouldnt stop there.
We recommend a budgeting app likeCleo,Rocket MoneyorSimplifi.They update in real time, send alerts and automate everything.
Your other option is to use a spreadsheet with built-in formulas to tally everything up.
This list is the foundation for your monthly budget.
Include any passive income, rental income, child support payments or side gigs.
Need Some Quick Cash?
If youre looking to boost your income this month, weve got just the thing for you.
Start with fixed expenses or monthly expenditures such as your:
Still not sure what a mandatory bill is?
Anything that will result in a late fee for not paying the bill goes into this category.
Be sure to include a line item for savings in your monthly budget.
Figure out how much you’re free to afford no matter how big or small.
If you get direct deposit, saving can be simplified with an automated paycheck deduction.
Something as little as $10 a week adds up to over $520 in a year.
Are you living within your income, or are you spending more money than you make?
Either way, its time to make some adjustments to meet your goals.
If you are overspending each month, dont panic.
This is a great opportunity to evaluate areas to save money now that you have itemized your spending.
Truthfully, this is the exact reason you started to budget regularly!
Having an emergency fund is often what makes it possible to stick to a budget.
When you do dip into that emergency fund, immediately start building it up again.
Is Your Bank Holding You Back?
Got $1,000 in checking?
Thesesmart movescould help you reach your next big savings goal.
As weve said previously, one of the best ways is simply to use a budgeting app.
You should review your budget monthly to monitor your expenses and spending and adjust accordingly.
Review checking and savings account statements for any irregularities even if you set bills to autopay.
If your income increases, give a shot to prioritize saving the extra money.
That will help you avoid lifestyle inflation, which happens when your spending increases as your income rises.
Start by listing all sources of income and necessary expenses such as rent, utilities, and groceries.
Allocate any remaining funds to savings, even if its a small amount.
Consider cost-cutting strategies like using public transportation, cooking at home, and canceling unnecessary subscriptions.
Utilizing community resources such as food banks and government assistance programs can also help stretch your budget.
One of the best budget apps isSimplifi by Quicken.
It allows users to manage their finances based on their personal preferences and financial goals.
The app lets you set spending targets in different categories like a planned spending bucket.
First, list all sources of monthly income in one column.
Subtract the total expenses from your total income to find your monthly surplus or deficit.
Sticking to a budget requires discipline and regular monitoring.
Set realistic budgeting goals based on your income and necessary expenses.
Use cash envelopes for variable expenses like dining out and shopping to prevent overspending.
Stephanie Bolling is a former staff writer at The Penny Hoarder.
Kaz Weida, a senior writer at The Penny Hoarder, contributed.
