11/1/2023 0 Comments Help creating a budgetLiving expenses: include things like your utility bills for electricity, water or money spent on food.ģ. Commitments: payments you have very little control over as they represent a legal obligation to pay, such as your rent or insurance payments.Ģ. When you look at your expenses, there are three important categories:ġ. Then you need to see where your money is going out – your expenses. One of the keys to a successful budget is to keep it simple.įirst, you’ll need to know how much is coming in – through your after-tax income from work or interest income from your savings. Tip 3: Adopt the Three-Category approach to Budgeting To help get you started on tracking your spending, try using this downloadable Money Diary from the Davidson Institute. It may also reveal those areas of spending that otherwise go unchecked, such as paying for subscriptions to multiple digital streaming services, that you may not use. Why? It can give you insights into how you spend money now and may highlight how spending even small amounts of money all adds up over time. To help you get started with budgeting – try tracking everything you spend for a short period of time. Taking small manageable steps can help you to develop a new behaviour or habit. To motivate yourself to try this new money habit, try completing the following sentence “if I create and stick to a budget, I will be able to….” Tip 2: Track spending for a month It can help you allocate your spending to live within your means and work towards achieving goals like buying a new car or saving for a holiday abroad. A budget can help you achieve your financial and lifestyle goals, enabling you to make considered choices about how you spend your money. But, are you clear on why budgeting is important for you? Think of a budget as a map or a personal GPS that can help you get from Point A to Point B, and helps you get back on track if you are lost along the way. Tip 1: Be clear on why you are budgetingĬhances are you’ve heard about the importance of budgeting. Curious how you can manage your money and create a personal budget? A personal money plan helps put you in control when it comes to allocating funds to cover regular expenses, unexpected costs, and help you achieve your financial goals.
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