How to Get Started Budget Planning

If you’re thinking about creating your first personal budget, it is natural that you might feel overwhelmed; after all, there is a lot to consider. But the important thing is to simply get started. Though your first budget might not be perfect, it is just your first step towards achieving your financial goals.

With this in mind, here are some tips to help you get started:

Audit your Spending

Before you create a budget, you need to understand how you are spending your money. By examining your spending habits (ideally for the past three to six months), you can create a clear picture of exactly where your money is going – information you can use to plan your budget, spot trends, and find ways to cut back.

Split expenses into categories

Once you understand how you have spent your money in the past, it’s important to group each of your purchases into a specific category (housing, utilities, food, entertainment, etc.) This will make it easier to plan out your first budget, and can also help you prioritize certain expenses over others.

Choose a budgeting strategy

Select a budgeting strategy that you believe will help you reach your goals, and start using it.

Take advantage of free tools

There are countless free tools that you can use to start a budget and stay on track. Apps like Wally and Mint can help you track your spending and bills, and there are dozens of free budgeting worksheets and templates available to download across the web (like the ones here).

Remember to factor in savings

At a minimum, you budget needs to account for your expenses: in essence, how you will spend your money. Ideally, though, it will also factor in savings and other financial goals.

Revisit and adjust

Remember, a budget should be a living document that you revisit each and every month as your spending habits change and you progress towards your financial goals. Don’t be afraid to adjust your budget as necessary to find something that works for you – even if it means potentially starting from scratch by trying a different budgeting strategy.

(This article written by: Tim Stobierski)

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