Budgeting you need a budget how to#

Then record those savings amounts in the future subcategory. Set aside a portion of your income for your wildest savings goals. Want to save for a Hawaiian vacation? Ready to save for a down payment on a house? That’s what the future category is for. This is my favorite subcategory in my budget. The fudge category is a small amount of money you set aside in your budget to make up for those mistakes.

Fudge is in reference to Ralphie’s famous tire-changing moment from “A Christmas Story.” Mistakes happen. The fudge category is reserved for all those miscellaneous expenses that you may forget about within a month. You can easily get carried away with this category if you’re not careful so it’s important to track it each month. Each of these things could have their own line item or you could lump them into the fun subcategory. Here is where you include Dunkin Donuts, Disney+, Amazon Prime, and all the fun stuff you like to spend your money on.

This doesn’t include your obsession with Dunkin Donuts or the copious amounts of streaming television subscriptions you might have. This would include rent or mortgage payment, utilities, internet, groceries, insurance, gas, and a cell phone plan. Fixed budgeted itemsįixed budgeted items include any expenses that are typically the same amount each month and are deemed necessary. If you’re brand new to budgeting, you may want to go this route first. If multiple categories sound overwhelming, break down your spending into four main subcategories: fixed, fun, fudge, and future. Likewise for haircuts, restaurants, and organic Colombian coffee. I’m generally detailed with how I break down my budget.

Step 2: Break down spending into subcategoriesīudgets can be broad or granular depending on how you like to slice up your spending. You can review the past month’s transactions and forecast for the upcoming month. I suggest doing this on the last day of each month. Set a recurring reminder in your calendar to open up your budget. If this is your first time budgeting, you may want to do a mid-month check-in to see where you’re at. Monthly budgeting can help you see how money is spent throughout the month. This could help you manage money more consistently. The benefit of budgeting per paycheck means you have a smaller amount of money to budget and on a smaller timeframe. Usually, this is measured in monthly increments, but you may want to budget by paycheck or every two weeks. Step 1: Budget by paycheck or monthlyĪ good budget primarily measures two things with your money: what amount is coming in and what amount is going out.

Budgeting you need a budget how to#

This basic step-by-step guide will give you the budgeting tools and budgeting tips you need to learn how to create a good budget. What if by simply writing down your income and expenses you could reduce stress and regain financial control? In fact, 36% of Americans report losing sleep over money, according to a study by Bankrate. Money can be a source of stress, especially if you’re vague about how you manage it. Sticking with a budget means you’re more likely to hit financial goals, pay down debt, and be more mindful of your spending. With several ways to answer the question, “how to create a good budget”, each method may not be applicable to you.īut which method can you stick with like melted cheese sticks to macaroni? Yup, that’s exactly how I want you to feel about your budget.