Posted on September 24, 2014 by Mayoli Weidelich
The B-word. It’s a word many people loathe. But establishing a household budget – and tracking where your dollars go – can help you see where to make adjustments so you can spend less and save more.
A budget is simply a breakdown of your money coming in and where you spend it each month. And it’s the first step in getting back on track with your finances. If you don’t have a budget or it’s been a while since you’ve updated it, now is the time to make it a priority. Although there are many different types of software you can use, an Excel spreadsheet goes a long way.
To start, input your income from all sources. Then, add up your monthly expenses. Don’t forget to add things like your morning coffee, magazine subscriptions, or items that occur bi-monthly or quarterly, such as property tax. Review each expense and decide if it’s a necessity or a luxury. If you don’t use it, lose it and get online or on the phone today to change or get rid of a service.
Once you’ve cut your spending go back and take another look at your budget. Did you include money for savings? If not, add it in. Even a small amount each month is a good start. Keeping an updated budget and revisiting it every month will help ensure that you are living within your means and can help boost your savings so you can focus on your future.
Source: M., Weidelich “The Importance of Budgeting”, September 24, 2014