"How does a budget help you to save money?" A budget is a system that can guide you as you make decisions and provide you with a way to gain control of your finances.
We're raised more often than not to believe that the word "loan" "stress" and "poverty" are normal.
That to live life you are bound to feel bouts of negative stress, possibly take out large loans to afford college, and become massively in debt to get out of poverty.
But before we throw a 17 year old freshly graduated high school senior or a seasoned adult into a pile of debt for sake of
... lets teach words like "budget" "planning" and "savings"
Budgets are about more than just numbers, spending habits and expenses written on a a piece of paper or kept in a budget app.
Keep reading to find out
Ever wondered how do you create a budget for a beginner? Or maybe how do you start a budget with no money?
Before you can determine how you can change your spending habits you can get organized when it comes to your money.
How to start your first budget
Print your bank statements look at your monthly bills
Here you'll add up your monthly expenses or separate them into recurring pay periods.
For someone who does not belong to a bank but mails out money orders you can always refer to your most recent bills and see what is the most you have paid (if you need to figure out how much to allot) or look at what the reoccurring amount was for the last few months.
These values include
your phone bill
transportation (If you have to take the bus this isn't a "want" it's part of your bills)
groceries (although this is an area that can be adjusted, everyone has to eat, place this under bills)
credit card bills
And depending on your lifestyle you may have more or less reoccurring bills.
Highlight these expenses and determine which ones will come out of your biweekly paycheck, your monthly paycheck, or annually.
From this list you can also see how much you spend.
Later while creating a budget we will be able to see what can be tweaked, adjusted, or eliminated to save you money.
Whats your income?
This includes any allowances, side hustle pay, your regular job, or public assistance benefits.
If any of the values fluctuate it means you would be repeating your budget on a weekly, biweekly, or monthly basis.
I get paid biweekly but at different times of the month I get paid more or less.
This especially becomes true during holiday season when I get paid for 6 days of work per pay period instead of 10.
What's your remaining balance?
"How much should I save" is a great question that doesn't have an exact science to it.
Some people think you should save a certain percentage but I believe it depends on your lifestyle and the availibility.
Eventually you can save a solid 10% of each check and increase this amount but if that is not possible (yet) don't beat yourself up.
We'll keep working to see what adjustments you can make. Sometimes it's a spending problem and not the income that you bring in, other times it actually is due to your income being lower than what your lifestyle needs.
Subtract your bills from your income and see what's left over.
What do you spend money on?
Spending money doesn't have to be on lavish purchases.It could mean a monthly hair cut, getting your eyebrows done every two weeks, items you replace in the house, adventurous food dishes.
Often it's not as specific as $20 on my nails + a $5 tip it's more like I know when I go into family dollar I spend at least $50.
After we have replaced the toilet paper and call ourselves saving money by buying unnecessary items in bulk, we try to just get by until the next paycheck.
Add up all extra expenses and subtract it from your remaining income.