We all have dreams of exciting vacations, worry-free days, and plenty of money. But, to get there it takes one sometimes boring thing: a budget.
So, today we're exploring how to create a budget that works for you!
Here are 5 small steps that lead to budgeting (and eventually financial) success:
1. Evaluate your budget categories
Before you can start, you must divide your budget into the spending categories you need every month. Visit this big list of budget expense categories to help you decide.
2. Record your monthly income
Count what you make from work, but also write down side hustles, bonuses, and investments that you use for living expenses.
3. Put Percentages to Your Budget
To keep it simple, try the 50-30-20 model. You spend 50% of your income on needs, 30% on wants, and save the last 20%. Or use any other variation of percentages you want. The point is that you're being intentional about how much you save, before you even use your budget. Then, set up a direct transfer to your savings every month for this amount (paying yourself first).
4. Keep Track
Now, test out your budget for a month! Use Mint, and Excel sheet, or pen and paper.
5. Make Adjustments
And finally, use the results from your first month to tweak your budget for the future. Our lives ebb and flow, and so does our spending and saving. But if you make a plan, you're 10x more likely to find success in your financial journey.
Best of luck to you! Do you keep a budget? Leave a comment and let me know how yours works for you!
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