How to Make and Keep a Budget

Are you trying to save money to buy a house or maybe take that vacation you’ve always wanted?

Do you know how to start? The simple answer is “You need a budget.” Making and keeping a budget can be a lot harder than you think. Start slow, follow these basics, and you will have a hefty savings account in no time.

Know Your Income​​

Sit down and track your income. Be sure to take into account taxes and your 401k. Your take home income after those deductions is called your net income. This is the money you have to spend. Once you know how much money is coming in each month, it is easier to decide how to spend it.

List Your Expenses

Now that you know what you are making, you need to look at your expenses. List your expenses into two categories: fixed and variable. Your fixed expenses are things like your mortgage that are the same price every month. Variable expenses are things like your electric bill. It will vary month to month. Estimate your variable expenses for each month and subtract those and your fixed expenses from your net income.

Track Your Spending

The money that is left after your expenses is usually what gets people in trouble. Look at your past bank statements and see what you are spending your extra income on. Set limits for these things so that you have money left over to put into savings. Keeping track of your spending will make it much easier to not spend as much.

Check It Monthly

Your budget will vary each month. Make sure you are staying on track with your plan and adjust it as needed.

By taking these steps, you will notice a big change in your spending habits. Take the necessary changes to be able to help your savings account.

If you think a budget is too complicated for you or you don’t have enough time to sit down and figure everything out, don’t worry! Carolina Money Minders has the tools to help you get on the right track. Call or email today for a free consultation.