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Budgeting

 
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What Is Budgeting?

 

Budgeting is another term for managing your money and is an excellent way for you to clearly see how much money you make, how much money you spend and how you spend your money.

 

How Much Money You Make

Before you create a budget, it is important to know how much money you make on a regular basis. A monthly time period is a good measure to use. Add up how much money you make (on average, after taxes) in one month.

 

How Much Money You Spend

Perhaps even more important than knowing how much money you make, is knowing how much money you spend. Add up all of the expenses that you have in a month, such as utilities, groceries, car payments, gas, rent or mortgage, credit card payments, etc.

 

How You Spend Your Money

Everyone spends money differently, but knowing how you spend your money gives you greater control over your financial future and provides you with accurate information about how much money you spend. Maintaining a daily spending diary for at least one week is a great way to see how exactly you spend your money.

 

Note: when using a daily spending diary, it is important to document every single thing that you spend your money on, no matter how small.

 

Once you know how much money you make, how much money you spend and how you spend your money, you are ready to create a budget.

 

Knowing what to expect when it comes to your finances can relieve stress and help you to build a strong financial future.  

 

For more helpful Budgeting information, please see the links below:

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Financial Literacy Toolkit