Budgeting is an essential tool for financial freedom – but only if you actually do it. Not having a budget, or having an unrealistic one you don’t stick to, can cost you thousands each year. Here's how to create a realistic budget and get your money right.
#1: Income
Whether you're paid a salary, have multiple streams of income, or are a business owner who has to pay yourself, your income is the backbone of your budget. But you have to be honest about how much you’re actually getting, AND figure in taxes.
#2: Expense Tracking
We often think we spend a lot less than we actually do. So make sure you’re tracking ALL of your expenses, whether debit card, cash, or however else. Don’t let “hidden” spending mess up your budget!
#3: Keep It Fun!
You won’t follow a budget that says you have to save 100% of your money and never spend on anything fun. Your budget should be comfortable – spending a bit on entertainment and hobbies is good for your mental health!
List your WANTS and NEEDS. Make sure all your needs are met, then split the rest between fun and savings or investment!
When we use a budget that works for our lifestyle, we can have fun as well as plan for meaningful things in our lives that an unrealistic budget would actually PREVENT us from doing!