You will have limited success saving money if you don’t make a budget.
There are a wide variety of apps and computer programs to help you create a personalized budget.
Apps make it easier to stay within budget – you can look at it anytime on your mobile device along with your banking apps. Let’s face it, no one leaves home without their smart phone!
Some apps are free, but don’t have a feature to link your banking information and they don’t categorize it automatically for you. Then you have paid app versions. Some of these have advanced features and analytics to keep your finances up to date.
Where do you begin when making your budget?
1) Calculate your monthly take home income and how often you get paid (ex. weekly, bi-weekly, monthly)
2) List all recurring bills or expenses and their due dates:
- Rent/Mortgage (due 5th of the month)
- Car payment (due 12th of the month)
- Food
- Gas
- Phone
- Car insurance (due 10th of the month)
- Student loan (due 20th of the month)
- Cable or Streaming Services (due 20th of the month)
- Utilities (electric due 1st, gas due 5th, water/sewer/trash due every other month)
- Savings withdrawal
3) Using the amounts and due dates above, establish how each paycheck will be allocated
There may be some expenses you aren’t going to be able to keep, but this is exactly why we are making a budget. This will give you an opportunity to remove or reduce excessive bills or unnecessary expenses and get you back in line with your earnings. Always remember – LIVE WITHIN YOUR MEANS!
A budget is a living document that can be adjusted to meet your changing needs. There may be a month you need more gas money and you’ll need to make some adjustments, taking away from another “bucket” or category. Do not to use credit cards to supplement the budget as a cushion or additional income. If you can’t afford it now, then contribute to a savings account to afford it later.
MoneyHugger 