When it comes to budgeting, many people don't. If you want to boost your savings, or find yourself struggling to make ends meet towards the end of the month, you need to create a budget.
Here are five steps to help you do just that.
1. Calculate Your Monthly Income
Figure out your monthly income If your pay varies from month to month, determine an average. Don't forget to include income from other sources like freelance work, rental properties, etc. Add everything and record the total.
2. Record Your Monthly Expenses
Start with your fixed monthly payments like your rent or mortgage, car payments, school tuition fees, and so on. Then add fluctuating monthly expenses, like groceries or credit card bills - this can also be an average of the past three months.
3. Subtract Your Expenses from Your Income
This simple step will provide you with a snapshot of your monthly finances. If there's a positive amount left, determine how much of that you can move to savings. If you have a negative balance, look into areas of spending where you can cut back - are there services or subscriptions that you aren't using? Can you start to bring lunch to work instead of buying meals every day?
4. Plan for the Future
A budget that works toward a goal has better chances of success than one without. You could be saving for a vacation, your children's education, or paying off debt. Choose a goal that has personal meaning, and see how it motivates your spending vs. saving habits.
5. Use Apps to Help Support Your Savings Goals
To keep track of your budget, you can go old school with pen and paper, maintain your budget manually in an Excel sheet or make use of online services and apps like Wally, Spending Tracker or search and compare cheapest prices for grocery products through Sallety . A budgeting app can help you save time, pays bills automatically, and reminds you of your savings goals.
Budgeting doesn't have to be scary. Take the time to look closely at your monthly spending so you can set important financial goals for yourself and your family - and work to achieve them.