How to build your own budget How to build your own budget

How to build your own budget

The right budget will help you know exactly where your money goes every month, how to prevent over costs, and more. You'll be surprised by how much it'll help to increase your savings!

If you feel that your incomes fade every month as soon as they land on your bank account, you need a custom-made budget. You don't need to hire a chief account for this purpose: you just need to sit down, analyze some items, and proceed to build your budget. 

The main goal of a budget is to control your personal finances. If you set the right budget, you'll have a guide and you can easily check if you are overspending in any category. Additionally, it'll help you create an emergency fund and even increase your spendings. 

The first step is to write down all your periodic incomes, not only your salary but also any other extra income,  like investment profits. Then, include your must-be-paid expenses: loans, mortgage or rent, utilities, car payment, other debt payments, insurance payments, etc. Now that you've got the big picture, write down your variable costs.

Look into your spendings for your past two or three months, by checking your account statements and your credit card receipts. Try to rebuild how much you spent on different categories (bills, groceries, gas, etc), and how much you assigned to entertainment, dinner, clothes, gifts, and recreation costs. 

Now it's time to build your budget! You need to deduct these expenses from your income. To do this, organize them in different categories and assign a budget to each one of them, based on the results you get and always trying to stay realistic. So, if you usually spent $500 in groceries, and you're willing to set aside some money for savings, you can write down $450; don't set an impossible goal like $200. 

Try your new budget and if you realize that you are overspending or underspending in any category, you can adjust it to these expenses. Once you get used to managing your estimates, you'll be surprised to find out that there's money left for savings!

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