How to create a budget
- Step 1: Analyze your spending
The first step to creating a budget is knowing where your money is going! Look back at your bank statement or track your purchases for a month to see where you have been spending your money. Break your monthly spending into categories. Once you know where your money is going every month, you can decide how you can change your spending in different areas to save money every week.
- Step 2: Set goals
This is the fun part! Dream big or small! What do you want to save up for? A house? A car? Retirement? Emergencies? No matter what your goal, it can be achieved by creating a budget.
- Step 3: Set up your budget to meet your goals
Setting a spending cap for each spending category (i.e. groceries, rent, clothes, eating out, etc.) to fit your needs and eliminate some of you want spending.
- Step 4: Monitor and stick to your budget
This might be the toughest part! Monitor the spending that you are doing to make sure that it aligns with your budget. This may be difficult at first, but after a few months the budget will become habitual. Monitoring your progress will also help you stick to your goal as you see yourself get closer to your goal each month.
Try out this calculator to figure out a budget that is right for you!
Other budgeting tools:
- Mint.com: budgeting, aggregate accounts (checking, credit card, retirement, loan), track spending
- Level: budgeting – real time money meter
- Fixx: easy way to increase your savings for tomorrow by helping you cut back on small items like coffee, takeout, and nights out today.
Fill out this Monthly Budget Worksheet to get your monthly budget on track.