It’s time to utilize that boost of energy you get from the summer weather and put it towards something that will help you! Being financially efficient and learning how to properly budget is important at any age. That’s why we at American State Bank want to provide you with some tips on how you can start budgeting.
Track Your Current Habits
This may seem excessive but it’s a great way to learn how to budget and, over time, you’ll be able to budget efficiently. Use a spreadsheet or app to track every single purchase you make – even if it’s a $2 candy bar at the gas station. You can also utilize credit card or bank statements for any purchases you may have missed if you’re starting a little late into your month.
List Monthly Expenses
List out your known monthly expenses such as your utilities, mortgage, credit card bills, student loans, car loan, taxes, insurance and so on. This will help you have an average idea of what you are going to spend every single month.
Identify Goals
You also need to take into consideration your goals such as saving for retirement, building an emergency fund, buying a home or car, paying off certain debts, going to college, saving for a vacation and so on. All of this will need to be allocated into your monthly expenses as well so you can see a realistic view of how much extra cash you come out with each month or if you don’t have enough money to allot to each goal you have.
See What You Can Cut
When you list out every single purchase you make for a few months, you’ll be able to see what is slowly building up and attributing to your debt. Do you make too many fast food or gas station stops? Are you using multiple streaming services when just one or two could get you by? Things like this will help you see what you can instantly cut and where you need to be more mindful of purchasing less.
Talk to Your Household
After going through your monthly expenses, random purchases, goals and areas you can cut, you may want to have a discussion with your household to go over how you want to budget. If you have kids or a spouse, you may want them to participate as well to increase the savings!
Decide on a Budget
Finally, after seeing what your income is and subtracting your monthly expenses and estimated random purchases, you can see what you’re able to put towards your different goals. After that, you’ll see what money is left to place into a savings account!
We hope this helps you discover how you can start budgeting. Then place your money into a savings account so we can keep it safe and easily accessible!
