Let’s face it: Budgeting does not sound very glamorous. But creating a budget will allow you to get your spending on track to reach your financial goals. We know you want to live your best life, and a budget can help get you there.
SET YOUR PRIORITIES
Everyone has different values when it comes to their finances. Smart About Money offers the LifeValues Quiz, a quick quiz to discover the hidden inner drivers that impact your decision-making. Your values will change throughout your life depending on experiences and personal circumstances.
BUILD A BUDGET
Now that you know what values drive your spending decisions, it’s time to create your budget. First, make note of your after-tax income. This is how much money you have to work with when planning your monthly budget. Then, subtract your fixed expenses, such as your rent or mortgage, utility bill, cellphone bill, credit card bill, student loans — whatever is applicable. Next decide how much money you are willing to put towards your financial “wants,” including money for food and entertainment. Consider putting the remainder into savings.
FIND YOUR STYLE
Budgeting isn’t one size fits all. You have to find out what style of budgeting works best for you. Some people might want to use mobile applications to track spending, others might use a pen and paper. It’s all trial and error, so don’t give up if the first budget style you try doesn’t work for you.
TRACK YOUR SPENDING
Now that you have your budget planned out, track your spending over the next month. Did you stick to your budget? Or did you find yourself spending mindlessly on items outside of your budget? It’s okay if you didn’t perfectly execute your spending plan this time around; there is always room for improvement. It may not seem ideal now, but when you reach your savings goals, you’ll feel pretty glam.
As always, we’ve got your back. — The On Your Own Team