Categorizing Your Current Spending - Deepstash
Categorizing Your Current Spending

Categorizing Your Current Spending

It's important to have an overview of your money and where it's being spent. It's possible to fit your expenses into these four categories:

  • Fixed Costs (Rent, Bills, Loans)
  • Important Investments (401k, Roth IRA)
  • Financial Goals (Home Payments, Vacation Fund)
  • Guilt-free Expenses (Dining out, Happy hour)

When you break down your current spending even further, you will be able to keep yourself sustained with this method because it doesn't take away the fun.

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MORE IDEAS FROM Conscious Spending Plan: Budget by Looking Into the Future

Automated System for Fewer Worries

Since you now have an idea where your money goes and how much goes out of your account, it's good if you set up an automated system because you won't have to worry about your checking account not having any money in it when you direly need it.

As long as it works for you, then you're on the right track.

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There are three steps to creating a conscious spending plan.

  1. Categorize your current spending
  2. Set up an automated system
  3. Keep track of your spending

Budgeting is about knowing that you're about to spend on something that matters to you. It shouldn't deprive you of having fun altogether.

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Traditional Budgeting is Up In Smoke

A person who has a conscious spending plan is all about having positive spending habits and not banning yourself from spending altogether.

If you've ever tried to put yourself on a budget and fail to stick to it every couple of months so, then you should definitely switch to something else. Traditional budgeting fails because they are unsustainable, focuses entirely on needs and ignores wants, and keeps you stuck on a cycle of looking backward.

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Keep Track of Your Spending

Whether it may be through a spreadsheet, an app, or a small notebook, tracking your spending is a surefire way of making sure you stay within the parameters of your spending plan.

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RELATED IDEA

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.

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Definition of a budget

A budget is an estimation of income and expenses over a set time. It is usually drawn up and re-evaluated periodically.

Budgets can be made for a person, a group, a business, a government, or anything else that makes and spends money.

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0 Comments

In a 'zero-based' budget, where we are putting every dollar to work for us, we have to put aside some 'fun money', a budget line for our fun activities, like a fancy cappuccino or the new shoes we desire.

Fun Money is not an excuse to be wasteful but a way to stick to your budget.

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