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Are you having trouble making your income sustain you from one paycheck to the next? You are not alone; many people do not know how to create and maintain healthy money management habits.
The first step to making sure your money is spread out evenly is to create a unique personal budget. People often mistake adopting random budgets that are not a good match for them, not realizing that their personal budgets are unique. This article will show you how to create a personal budget unique to your goals and needs.
Track How Much Money You Have Coming In
Some people have inconsistent monthly income while others have standard monthly salaries. Money management requires discipline and consistency. You need to take your time and analyze how much you receive in a month. You may receive different sums of money each month. Do you take part in the extra income-generating activity? If so, write down how much you are likely to make from your side hustle.
If you do not know how much you get in a month, look for bank statements from the last few months to analyze how much money you are likely to receive using the average.
Make A List Of Your Monthly Bills And Expenses
Next, you need to create a list of all your recurring expenses. Your list should include the following:
• Rent
• Debt
• Phone bills
• Utility bills
• Cell phone bills
• Vacation expenses
• Internet bills
• Medical/ insurance bills
This list will help you gauge your monthly needs and give you insight into where you need to channel your money. In addition, you will get a better picture of your expenses and come up with ways to reduce or remove some costs you deem unnecessary.
Write Down Your Personal Financial Goals
Using a spreadsheet, fill in your income and output to picture your current financial situation. Next, write down what you would like to get done using the extra cash. Statistics have shown that you are more likely to realize your financial goals if you write them down. You can separate your goals into short-term and long-term goals. It is also essential to ensure that your goals are measurable, specific, achievable, realistic, and time-bound.
With time your goals may change; hence your budget may change too. If you create a timeline to work with, you might have to trim off some unnecessary finances to get extra cash flow towards your goals. This step will help you decide how much money you want to put away in savings. Achieving a small goal will give you the motivation to pursue bigger goals.
Get Good Budgeting Tools
One must be realistic when creating a budget. You can not expect to remember all the details and plans you make, especially with a busy schedule. Budgeting apps will help you keep track of your goals and plans. You can set reminders to make deposits or get a warning if you spend a certain amount of money.
Use Cash
Avoid using a debit card or credit card to make purchases. Using cash is more likely to make you think twice about everything you spend on. It will help you think about how much you want something and if you are willing to sacrifice your goals for it.
Bottom Line
A successful budget will help you understand where all your money goes. It will also aid in keeping track of where your income goes. A personal budget is the first step towards making your money work for you. Good budgeting is instrumental in crushing your financial goals; it can help you break through any financial barriers that have been a stumbling block in the past.
