What a Budget Does

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.

With a budget, you can begin to prioritize your spending and better manage your money and financial future.

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Your 6-Step Guide to Making a Personal Budget

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www.thebalance.com
Your 6-Step Guide to Making a Personal Budget

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  • Budgeting = creating a plan to spend your money

    Budgeting is simply balancing your expenses with your income . It's a plan for the coordination of resources and expenditures. When you budget your money, there’s a desired outcome. And being able to track your spending should ultimately move you in the right direction towards meeting your financial goals.

    5 Simple Steps to Creating a Budget That Actually Works

  • How to create a budget

    Gather Some Financial Information : gather a detailed list of your income and expenses. Select a Budgeting Method : figure out how you’ll budget your money to meet your most pressing financial goals. Create Your Budget : tally up all your expenses and income to see where you stand and allocate expenses. Execute Your Plan : you can use a notebook, pen and paper, a spreadsheet or an online software. Reward Yourself : you can work a small percentage into your budget to treat yourself each month.

    5 Simple Steps to Creating a Budget That Actually Works

  • Steps of the zero-sum budget

    Determine how much you make on any given month. List your bills : Once you determine how much money you'll make this month,  figure out how much money you need to spend next month. Compare and contrast :  Once you see your monthly income and your monthly bills on paper, a clear picture of how much money is left over emerges. Spend all of your money on paper : decide where that money will serve you best. Track your spending .  Make adjustments to get it right.

    The power of a zero-sum budget

  • Budgeting for a Life You Can’t Afford

    This becomes a problem when you’re spending for a life you can’t afford. It puts pressure on your budget and encourages you to live in a paycheck to paycheck cycle. Assess your financial situation, cut back on your expenses, prioritize your money goals, and then come up with a new spending plan.

    The Most Common Budgeting Mistakes and How to Fix Them