But lets face it you dont want to be struggling paycheck-to-paycheck, swimming in debt with nothingsaved for emergencies.
Creating a budget and sticking to it could give you the financial freedom you crave.
And it doesnt have to be a grueling process.
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Can You Survive 10 Days of Budgeting?
If you should probably wrangle your budget, it may be time to consider a savings challenge.
Weve laid out exactly what you oughta do to create your own model budget in four pretty simple steps.
We typically like to focus on a monthly budget, because most bills are due once a month.
Get started by logging into your checking account online and grabbing your last couple months worth of bank statements.
While youre at it, grab your credit card statements, too.
First, write down your monthly income.
This should be your take-home pay for the month your monthly after tax income.
This part is easy if you have a full-time, salaried job.
Self-employed budgeters can benefit by taking a step back each quarter to examine their income.
Having to check in four times a year can be great for your budget.
But dont just stop there when calculating your monthly income.
From here, start adding up your variable expenses.
Analyze your spending habits.
What about the amount of money you drop on nonessential expenses like eating out and drinks with friends?
To get a full picture, organize your spending into budget categories.
For example, movies, concerts and museum visits can all go under entertainment.
Your gym membership, yoga membership and the drop-in rate on a CrossFit class can all go under fitness.
Look at a few months of statements to get an average for this part, too.
That will give you a more accurate picture of your finances.
When you create a personal budget, it ought to align with your goals.
And dont forget aboutfunding your retirement no matter how far you are from that milestone.
Need a Hand With Bills?
Listen, we know its tough out there.
But theres no shame in asking for help.
These companiesmake it easy to help yourself and your bank account.
Next, get your priorities in order literally.
You might not get your priorities right the first time, and thats okay.
Do some adjusting to strike a balance between fun and responsible spending.
you’re free to take things a step further by mixing financial goals with personal ones.
There are many different budgeting methods to choose from.
Log your income and track your spending usinga Microsoft Excel spreadsheetor a Google Sheets spreadsheet.
Create bar graphs, line graphs and pie charts for data visualization.
A bare-bones budget takes into account only your most essential needs.
Use a bullet journal budget to creatively track where your moneys going.
Kakeibo is a long-standing Japanese budgeting method that incorporates mindfulness into a basic household ledger.
You track your spending by using four simple budget categories needs, wants, culture and unexpected/extra expenses.
Jot down your remaining balance at the end of each day.
The half-payment methodhelps take some of the stress away from paying recurring bills each month.
The paycheck budget ignores the typical rules of creating a budget to cover your expenses for a month.
Instead you budget for each time you get paid whether thats weekly, biweekly or semi-monthly.
You might choose to incorporate different aspects of various budgeting methods into your personal budget.
There are tools and actions that can help.
While budgeting by hand works great, your smartphone can streamline it.
Some will even make a budget for you based on your past spending habits.
Other apps require you to manually input your spending.
This list ofour favorite budgeting appswill help you choose one you love.
If youre managing household finances with a partner, heres our recommendations for thebest budgeting apps for couples.
Its natural to forget about some expenses or set spending limits that are too strict the first time around.
Just keep at it and make adjustments as necessary.
check that to include somefun money spendingin your budget so your money plan doesnt feel so restrictive.
Remember, making a budget is not a one-time event.
Keep an eye on your plan as your goals and life change.
Is Your Paycheck Not Going As Far As It Used To?
We get it.Everythingis more expensive than it used to be, but your paycheck hasnt kept up.
When money is tight,these resourceswill help nearly everyone.
Beginners should lean into tools that will keep their spending within the parameters they set.
Many budgeting apps will alert you when youve gone over budget or are getting close.
Another option thats great for beginners is the cash envelope method.
Using physical cash and having a limited amount to spend makes sticking to your budget more tangible.
Fixed expenses dont have to be permanent.
Can you take on a roommate to cut your living expenses in half?
Many financial experts advise saving 20% of your net income.
While thats a good savings goal, how much you should save depends greatly on your individual situation.
you’re free to work your way up to saving 20% as your income grows.
Of course, if youre able to save more than 20% of your income, thats wonderful.
Youll be able to reach your financial goals faster.
Contributor Whitney Hansen updated this post.
