How to Budget Money 101 (You Know You Need To)

 Budgeting The nine-letter word in personal finance either excites you or conjures up images of torture. 

Budgeting is a financial exercise highlighting your earning, spending, and saving habits. It provides you with an overview of exactly how much money you’re making, how much money you’re spending, and how much money you’re saving over a specific period of time. 

What is a Budget and Why Should You Have a Budget?

Step 1: Totalling your income

How Do I Make a Budget? What are the Steps Involved?

For the most part, there should be zero, or hardly any, surprises (both good and bad!), and you might even be able to accurately nail down your monthly income off the top of your head.

Step 2: Totalling your expenses

How Do I Make a Budget?  What are the Steps Involved?

One of the most overlooked outcomes here is not that totaling your expenses indicates just how much you’re spending, but that it provides actionable insight to help you understand how and where you should be allocating your hard-earned money. 

Step 3: Let’s calculate!

How Do I Make a Budget?  What are the Steps Involved?

 It’s time for you to actually “calculate” your budget. Again, the calculation is quite simple. By minus your total expenses (calculated above in step 2) from your total income (calculated above in step 2), you’ll arrive at a number that’s either in the green or red, so to speak. 

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