• Where does your money go? Tracking your finances is the first step to creating a budget. You have to know where your money is going to know how to make it go in the right direction. For two weeks or so, write down every time you spend and earn money. Next, add up your expenses and income. In a perfect world, your income should outweigh your expenses. Subtract them from each other and you have your budget. Your best results will come from tracking your money in an extended period of time.• Wants vs. Needs. Now that you have an understanding as to where your money goes, you can assess your wants and needs. Do you really need to eat out three times a week? Was that party worth the $10? Was it smart to skip this months bill?
•Prioritize. Create a list of your "money priority". This can include bills, savings, etc. Your money should go to your priority before spending on what you don't need.
•Pay on time. Pay your bills on time to avoid late charges. Set up auto-pay with your bank and create reminders for yourself. I keep all my bills on my fridge with due dates as a daily reminder!
• Pay yourself first. Find an appropriate amount in your budget to pay yourself every month. Just like a bill, set aside $10, $20, or whatever amount to your savings. This is the easiest way to grow your money!
•Cut the baggage. Cut out the areas where you can save or do without. For example, to lower your monthly phone bill, you can get rid of your data plan. Or, cook more meals to save on food. Try public transportation to save on gas too! You can find simple ways to lower your monthly expenditures after keeping track of your money!
Budgeting takes practice and time, but is the first step to having a flourishing income. Sticking to a budget will help you to pay your bills on time and find ways to save!
Dopefully,
Shanika
