Build a Realistic Budget
We all have something we are saving up for; a goal or a dream of something we hope to one day have or achieve. Whether it will require a small or large investment, it will usually require some form of budgeting to obtain the item. While budgeting and saving comes naturally to some, it is harder for others to stay focused and put away money for a rainy day. Here are some steps to follow when trying to build your budget:
Monthly Expenses – Making a list of your monthly expenses can be eye-opening. Many people who are signed up for automatic payments soon forget exactly where their money is going each month. A list of each payment you make and what it is for will help you get your budget organized.
Monthly income – Next, it is important to know how much money you are bringing in each month. Look at paystubs and bank statements to make sure you can accurately determine how much income you bring in monthly. Knowing this number will give you a good baseline to your budget.
Saving Amount – Do you have something specific you are saving up for? A home? College? Having an exact amount as your goal is helpful but not necessary. Just saving for a rainy day is a common goal in today’s world. Determine how much a month you would like to store away and add that number into your budget expenses. This way, you are separating that money from the cash you are allowing yourself to spend.
Establish a deadline – Is there a deadline you need to have the money saved up by? Take how much you need divided by the number of months you have to save and you will get the amount you need to set aside each month. Add this number to your budget.
When you have completed your budget, your income should be greater than you expenses. If it isn’t, this is when adjustments need to be made to your spending habits. Not adding up? Take a closer look at what expenses can be reduced or eliminated. We often spend money on gym memberships we don’t use, daily coffee we don’t need, or magazine subscriptions we never read. Dive in and make changes today to see results faster. Need some extra help to keep your budget top of mind? Check out apps like Mint or GoodBudget for updated tips, reminders, and alerts to help keep you on track all month long. Once you have completed your budget and monthly financial habits, saving money and taking control of your accounts can come quickly and the results may surprise you.