It doesn’t matter how much money you earn or how old you are. If you have an income and expenses, you can make a budget. Why do you need one?
- To have money until the next paycheck
- To know how much it costs you to live
- To know what you spent your money on
- To create realistic savings goals
- To be able to adjust your expenses when there are some dramatic changes in your income
To do that, a credit union near me in Highlands Ranch offering Intro to Budgeting training suggests that a budget has to reflect your financial reality: income of any kind, savings, debts, and fixed and sporadic expenses.
The easiest way is to start with the income, which is easier to quantify. Write down, in a column, anything that adds to your budget during a month: salaries, rent that you collect, allowances, etc.
In another column, write your fixed expenses: installment, rent, utilities, subscriptions, insurance, alimony, donations, the money you put in your savings accounts, etc.
Next, write down the necessary but flexible expenses: household supplies (food, hygiene products, medicines) and everything related to your lifestyle (clothes, going out, pocket money).
There is another category that people often ignore: debt. In addition to the installments, in a separate column, you should write your debts – loans, credit card limit exceeded, and loans from friends. This way, you can make a plan for returning them.
Now that you know how much you earn and spend watch for a few months how realistic your budget is, and you will soon have a real picture of your financial life.