Don't let your finances control you. Instead, get complete control over your finances by using these 4 easy budgeting steps!
Everyone needs a budget.
A budget can help you control you spending, save more money, save up for the things you want, get out of debt, stop living paycheck to paycheck, and reach your financial goals.
All you have to do is follow 4 easy steps and you have yourself a complete personal budget!
Step 1: Monthly Income
Before you can budget you'll need to sit down and assess your monthly income. This total is going to get divided into the categories we'll go over below.
Step 2: Fixed Expenses
Fixed expenses are any expenses you have to pay every single month. This includes expenses like rent, your mortgage, utilities, insurance, debts, monthly subscriptions, or phone bills.
It is recommended that you keep your housing expenses under 28% of your monthly gross income.
Likewise, it is recommended that you keep your total debts under 36% of your monthly gross income.
Step 3: Savings
Now that you have your fixed expenses accounted for in your budget, it's time to take care of your savings account. Building a savings account is important for future emergencies or expenses.
How much you save each month is completely up to you! If you can only afford to set aside $5 each month that's fine. Every little bit helps.
But it's a good idea to work toward an emergency fund big enough to sustain you for at least 3 months.
Step 4: Varied Expenses
Varied expenses are expenses that change in amount every month, like groceries, utilities, clothes, gas, clothes, or entertainment.
Look at your transaction history to determine what categories are included in your varied expenses. Then determine how much you want to spend in each category each month.
Now all you have to do is figure out the best way for you to track your varied expenses so you don't go over budget. Using a cash envelope system can be a really easy way to make sure you never go over budget.
Use an App
You can also use a budgeting app to help keep track of your spending. Below are the 5 most popular budgeting apps available right now.