7 Tips For Budgeting
A monthly budget can give you peace of mind and allow you to effectively manage your money, prepare for emergencies and save for large pricey items.
1. Set A Realistic Budget
List the money you have coming in each month and the expenses that you expect each month. This will give you an idea of how much extra money you have to spend each month. If your income is less than your expenses you will need to cut back on spending.
2. Estimate Higher Expenses
Round up on the amounts that you estimate for your expenses. It’s easier to figure out what to do with extra money at the end of the month than it is to try and find cash last minute because you did not plan properly.
3. Needs And Wants
Your expenses should put in two categories, needs and wants. This will help you recognize items that you can cut out of your monthly spending if necessary. The items in the needs category come first, and whatever money is left over after can be spent on wants.
4. Include Savings Into Your Budget
It is recommended to add an additional expense in your budget for emergency savings. About 10% of your income should be set aside and only used for emergencies such as car repairs or medical expenses.
5. Allow For Flexibility
Just in case there are unexpected expenses from month to month you should add a little padding to help to ensure that you don’t go over budget.
6. Keep Track Of Your Spending
it is very important to track your spending and ensure that you are staying within your planned budget. Every month, look to see if you over or under spent in any areas.
7. Edit Your Budget Every 3 Months
Look back at your spending habits every three months and make adjustments on items that you are consistently over or under spending on.
Once you have your budget set up you should become more aware of your spending habits and have a plan of action towards financial success. Good luck!