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How to Start and Maintain a Budget

You might be having trouble with formulating a consistent budget, or maybe you want to get out of debt.

It may sometimes feel like you don’t have enough money to budget in the first place. Most don’t realize that this is a better reason why they should do it.

By performing these simple steps with consistency, you can go back on track with your finances:

1.    Add your regular income.

To prevent spending what you don’t have, you should carefully consider the money you already have. This sounds obvious, but there are ways to do it the wrong way.

Consider all of your sources of income, then add up the sources that you get the most regularly. These include wages, child support, and alimonies.

For the sporadic times that you gain income outside your job, make them nothing more than a bonus for your budget.

Otherwise, calculate estimated rates for fluctuating income with an estimate of expected monthly income.

All this could go into a dependable document or a physical notebook you can check from time to time. This will help you with the steps later on.

2.    Subtract fixed expenses.

Fixed expenses are what you’re obligated to spend every month, like mortgage/rent, child support, property taxes, and alimony. These can also be divided by day, week, and year.

Daily expenses would include public transportation and food. If you drive a car or buy your groceries, this can be under weekly expenses instead.

Based on your calculated income before this step, write the maximum amount you’re willing to spend on bills and expenses. By this time, you should set your priorities between necessary expenses outside monthly bills.

After you’ve listed it all down, you can start adding variable expenses, which are essentially the things you want daily. Subtract this number from your calculated income, again for later steps.

Keep note of when you receive your regular and expected income. It’s best to calculate these expenses by month since this is when bills are usually due.

When you have expenses due yearly or monthly, divide them by 6 or 12, respectively.

3.    Calculate your net income

After you’ve subtracted your expenses from your income, whatever’s left of your money is your net income.

Ideally, this is a positive number – this means you have leftovers to save or spend later on.

If you have a debt to pay, subtract it further.

When you find negative incomes, something might be wrong with your spending. Go back to the previous step and figure out how to live within your means.

Calculator and red toy car on a variety of national currency banknotes background.How to Deal with Budget Slumps

It’s normal to find a less than ideal figure for your budget. It may seem like there are no ways to get out of it, but there are.

Your problems won’t get fixed right away, but a little sacrifice can go a long way:

Take note of your daily spending

Use a notebook to list down what you spend on in a day and make it a habit. Give it a week, minimum.

Do it even after you’ve managed your money well. This helps you keep track, limit, and adjust what you spend money on.

Hold back on impulsive purchases

Hopefully, keeping track of your spending prompts you to say “no” to unneeded purchases, especially if they’re costly. Keep it out of reach until you’ve checked your budget to tell if you can afford it.

Know your spending limit

To save money, you need to stop spending. It could be a struggle to do so, but the step is essential to keeping a positive budget.

However, this doesn’t need to be cut-throat nor detrimental to your social life. Take the time to find a realistic budget that can work for you.

Your necessities and debt should always come first.

Check your ledger before you say yes to taking vacations and splurging on food. This will keep your conscience clean, both for your debtors and yourself.

Find additional income

Get a new job, an additional part-time job, or find an additional source of income outside of your work. You could also start selling pre-loved items.

However, these can only help you with short term savings. Taking an additional job can take a toll on your health, and gains in selling can only last for so long.

If you can’t make ends meet with your current job, you might need to ask for a raise. If you can’t get it, you should start finding a higher-paying job.

Ask for help

Researching online can only get you so far. If you’re struggling with grasping how to balance your spending problems, it’s okay to ask for help.

Some take classes on money management, and some hire financial planners to create long-term strategies.

With handling debt, you can work with credit counseling services to restructure debt and possibly negotiate with creditors.

Set up an Emergency Fund

Put aside a savings account that only covers unexpected expenses. If you’ve saved enough to keep your net income positive, adjust your budget to insert a specific amount into it.

To avoid temptation, you should keep these funds in a separate account from the one you use most often. This can drive away temptation as you earn more for it.

Despite all these tips, this is the most important part of the process.

Emergencies are inevitable, albeit in unexpected expenses or financial emergencies. By saving at least $1,000 in your emergency fund, you’ll find yourself in a lot less stress.



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