Budgeting is a Smart Move

When you know how much you spend compared to how much you make, you can take control of your future. It can help you get one step closer to your financial goals.

By Leah Golden

 

Putting together a budget can be easy. You will need to invest some time looking at how much goes in and how much goes out of your bank account. Check out your credit card statements, too. Your credit card website may have a graphing feature that shows your spending categories.

Once you have all that together, there are several budgeting methods you can use to help you get started.

• The 50-30-20 Budget is the simplest. Once you group your expenses into needs (50%), wants (30%) and debt reduction/savings (20%), you have a road map for adjusting the way you spend.

• The Envelope Method is easy to understand, but stricter, especially if your spending style is swipe-and-go. Traditionally, you would start with envelopes for each spending category and fill them with a budgeted amount of cash. The modern version: List your budget limit and tally your expenses on the envelope. When you’ve hit your limit, you’re done spending in that category.

• The Zero-Based Budget is for those with excellent impulse control. You focus your awareness on your money and make a point to spend every dollar deliberately. Using an app can help you track your spending.

Whether you choose a specific method or make up your own, the most important step is the first one. Just do it.

Personal Finance