|EASY TWO STEP BUDGET|
|Posted on: Jul. 05, 2017 in Money|
You rarely hear anyone truly excited about spending some time budgeting. It’s boring, tedious, and, if you’re not doing it right, it’s time consuming. For many people, it’s the painful realization that they don’t make as much money as they’d like, their debts are too high, or they spend more than they should. If you look at budgeting like this, it’s no wonder you wouldn’t want to do it.
But budgeting doesn’t have to be difficult or eat up an entire day. It’s also a great tool to help you rein in your spending and meet your financial goals. The first step is to categorize your spending.
Next, you’ll need to add up your income. This can include a day job, a side hustle, or any other regularly anticipated money you receive each month. Once you have that amount, you’ll start subtracting your expenses. Begin with the Monthly Musts and work your way down the first three items on your list. The number you’re left with is what you have available to cover those nonessential items. Do you have enough? Great. If not, it’s time to make some cuts.
Identifying the things you need to spend on and setting yourself up to have the money you’ll need down the line is the first step toward financial stability. While there’s nothing wrong with spending money on fun and entertainment, doing so without taking care of the top priorities will leave you in a hole each month.
You’ll want to revisit this list from time to time and adjust numbers as you pay off debts and cut back on expenses that you no longer deem necessary (Did you cut cable or start working out at home instead of the gym?). If you get a raise or another job, this will allow you a little more flexibility with your budget as well.
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