6 Easy Steps to Set a Budget that You’ll Actually Stick To
Whether it’s something you need or something you want, creating a budget can help you keep your spending in line so you can reach your financial goals.
Creating a budget may seem daunting, but this video walks you through setting up a budget that you can actually stick to. Once you know what your goal is, creating a budget to achieve that goal comes down to six steps:
- Know your income: Make sure you’re using your net income (how much money you bring home), not your salary. Taxes, insurance, and 401k contributions may all cut into your income before you actually see that money.
- Determine your fixed expenses: These are expenses that don’t change much throughout the year, like rent or mortgage, car payments, insurance, and student loans.
- Determine your variable expenses: This includes expenses that change based on how much you use them, like your phone bill, groceries, clothes, and entertainment. You have a lot of control over these expenses.
- Prioritize: Determine what’s really important to you. What do you feel is truly necessary in your life? Take an honest look at what you truly need, and what you just want. You may find that it’s worth it to you to sacrifice some of your variable expenses in order to reach other financial goals.
- Follow your spending and review monthly: Hold yourself accountable by following your spending every month. It’s easy for small expenses to start adding up!
- Keep track: Find a way that works for you to track your spending. There are lots of options out there, from old-fashioned pen and paper to an online app.
As the video explains, budgeting is doable; you just need to commit to being disciplined, planning your expenses, and prioritizing them thoughtfully.
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