How To Create A Budget
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How to Create A Budget

Creating a budget will grant you peace of mind in knowing your finances are well off. It's important to have control over your money, both so you can control spending and to have a sense of financial freedom. By creating a budget, you can save money for your short or long term goals.

To get started building a budget, follow the strategies below.

Set goals

Make a list of all the goals you want to accomplish financially, both short and long term. Ask yourself why these goals are important, how you are going to carry them out, and how quickly you want them to show results. Short term goals should be about a year to achieve -- such as paying off credit card debt or saving to buy gifts for family over the holidays. Long term goals, on the other hand, could take years. These examples might be retirement or educational expenses.

Fortunately, your goals can be varied and fluid -- you can update the list whenever you need to. Try using a retirement calculator to figure out what savings you should have for retirement.

Make a plan

You'll need to figure out your net income, then create a budget with fixed expenses and variable expenses. Some expenses, like mortgage are fixed. They are the same each month. Entertainment and gas on the other hand change from month to month. A software program like Quicken or Mint can help to figure out where your money is going and help you allot categories for it.

Track spending

First, record your daily spending with pen and paper or an app on your smartphone. Then, plan for your next month's expenses and income so there are no surprises. Also keep your family member updated on spending so they can provide input. Finally, look for where your money is mostly going and look for a way to can cut back. Smaller savings can really add up, so maybe try shopping at a cheaper grocery store or buy generic brands.

Check in monthly with your budget

It's important to take a look and monthly spending to compare it to your personal budget worksheet you've outlined. If your'e going over budget, think about where you can cut back to control your spending.

The important thing in making a budget is to continually update it to reflect your income, expenses, and goals. This way, you'll have the peace of mind in knowing your finances are fully taken care of through your budget.


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