A budget helps create financial stability. By tracking expenses and following a plan, a budget makes it easier to pay bills on time, build an emergency fund, and save for major expenses such as a car or home.
Habits to help you reach financial freedom:
- Set life goals
- Make that budget!
- Track your spending habits
- Create automatic savings
If you're running out of money before receiving your check at the end of the month, or if you're in debt from borrowing money, start by reviewing your finances and making a spending plan.
- Gather your financial paperwork (such as bank statements, tax returns, credit card statements, bills, etc.
- Calculate your income
- Create a list of monthly expenses
- Determine your fixed expenses (costs that don't change such as rent, loan bills, etc.)
- Determine your variable expenses (costs subject to change such as gas, groceries)
- Total your monthly income and expenses and make adjustments as needed.
- Tracking your spending habits
Doing this on a regular basis will give you the most accurate picture of where your money is going. Then you can account for all of your financial wants and needs moving forward.
To set up a plan:
- Check your account statements
- Categorize expenses
- Use a budgeting or expense tracking app (or write it down)
- Identify and address room for change
- Create automated savings
- Creating an automated savings plan helps to manage your spending habits and boosts your savings.
Link your savings and checking accounts
Request direct deposit from your employees
Ask that part of your paycheck be deposited into savings with the rest going into checking.
Learn more at: https://mhanational.org/managing-your-money