How to Create a Workable Budget
It can be difficult to keep track of your spending, especially if you don’t have a budget in place. But having a budget doesn’t have to be complicated or time consuming. By following a few simple steps, you can create a workable budget plan that will help you stay on top of your finances and meet your financial goals. Let’s take a look at the basics of creating and maintaining a budget.
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Step 1: List Your Income and Expenses
The first step in creating your workable budget is to list all of your income and expenses. Start by listing all sources of income, such as wages, investment earnings, rental income, etc. Then list all of your monthly expenses including rent/mortgage payments, utilities, car payments, groceries, credit card payments, etc. Once you have listed all of the information you need it is time to move on to the next step.
Step 2: Track Your Spending Habits
Now that you have an idea of where your money is going each month it’s time to start tracking your spending habits. This can be done using old-fashioned pen and paper or with one of the many budgeting apps available today. The goal here is to get an accurate picture of what you are spending each month. Once you have that information you can make any necessary adjustments going forward.
By tracking how much money is coming in and going out each month you will quickly see where cuts can be made or if there are areas where more money needs to be allocated each month. You may even find that some months require more money than others. This could be due to holidays or other events like birthdays or anniversaries that require extra funds for gifts etc.
Once you’ve tracked your spending for several months it’s time for the next step—setting goals for yourself!
Step 3: Set Financial Goals
Now that you have an idea of where your money is going each month it’s time to set some financial goals. These could include anything from paying off debt quicker or setting aside funds for vacation or retirement savings accounts. Whatever your goals may be make sure they are realistic and achievable within the timeline you set forth for yourself! Once these goals are in place it’s important to stick with them! Try setting reminders on your phone or jotting down notes in order to stay on top of them throughout the year!
Conclusion
Creating a workable budget doesn’t have to be complicated or overwhelming – simply follow the steps outlined.
- List, all sources of income as well as monthly expenses
- Track those expenses over several months
- Set some achievable financial goals for yourself and stick with them.
If you’re looking for more guidance and help creating a budget, the Cash Flow Formula created by Kati Kiefer of TrueMoneySaver.com offers an inexpensive and straightforward option. Katie provides step-by-step instructions on budgeting, setting financial goals, and developing a savings plan. Using google sheets, the budget and formulas are all conveniently laid out and you can get started immediately. Additionally, this system is designed to be suitable for any income level or lifestyle. No matter your current situation, the Cash Flow Formula can provide invaluable help in organizing your finances. I have personally been using this system for the past six months. I have found it easier to to stay on top of my finances and foresee shortfalls. Kati’s system is simple to use and her videos are on topic and easy to follow along.
To check out the Cash Flow Formula at Katie Keifer TrueMoneySave.com
Share in the comments what system you like to use for budgeting.
