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With the perspective of an economic crisis in 2020, some of us already have to rethink our spending habits to make ends meet. Others may feel more financially secure. But when recessions come, they tend to come for everyone.
We have to start reevaluating our budgets, and possibly start saving as much as we can.
Whatever income you are earning right now should be treated like it’s temporary.
Treat your current income as if it might need to stretch for as long as possible. It doesn't mean you need to cut back on everything, but you might need to consider cutting some of your expenses so that you can put more money into savings.
If you're unsure what you should be doing with your money right now, cut expenses and save every bit of money for the next 30 days. Then, reevaluate.
Continue to budget, reflect, and repeat while saving as much as possible.
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As a personal financial planning tool, a written, monthly budget allows you to plan for how you'll spend and/or save your money each month and also keep track of your spending patterns.
The word "budget" is often synonymous with restricted and rigid, making you want to avoid it. Instead, use the term "cash flow."
The formula for cash fl...
Your budgeting style will change over your lifetime. You may use the envelope method when you need to be stricter with yourself.
Some people feel less stressed when they use budgeting styles that track every penny. Others find it is enough to run cash flow and know there's some money left each month for nonessentials. They don't need to itemize where every dollar is spent. See what style of budgeting support your goals and sanity, then adjust as needed.
Much personal finance advice focuses on making cuts. The information is useful when you're trying to avoid mindless spending. However, there is a time to shift your focus from slashing to earning.
Polish your resume, and apply for open roles that could be earning more. If you're not looking for a career move, a side hustle can help increase your income.
No matter how little or how much money you earn, creating a monthly budget is one of the most important aspects of managing your finances. What gets measured gets managed.
The Envelope system is a way to track your variable expenses like food, entertainment, and drinks.
This method, preferably used weekly, allocates a certain amount in each category in labeled envelopes (food, drinks, movies, etc.). Once the envelope is empty, you are done spending in that category.
The principles that make a good budget, something you can stick to: