“Creating a budget: A step-by-step guide for beginners” is a topic that covers the basics of budgeting for people who are new to managing their finances especially who are in their 20’s. A beginner’s guide to creating a budget would typically cover the following steps which will effectively guide you to budget for basically everything in today’s fast pace life:
- DETERMINE YOUR MONTHLY INCOME: This includes your salary, any side hustle, weekly gigs, freelancing or any additional income sources of income and any other financial support you may receive. You must tentatively, if not exactly know how much is your monthly income if you are living alone or living with your spouse to get your subconcious mind ready to start budgeting. Some people tend to avoid seeing how much they make which can suddenly disrupt their budget in case of an emergency or for any XYZ reason.
- MAKE A LIST OF ALL EXPENSES: Make a list of all your monthly expenses which includes housing expenses like mortgage, property taxes, bills etc, transportation expenses like Car finance charges, Insurance, tentative Gas charges, Grocery and restaurant expenses, coffee expenses in case any, entertainment expenses, and any other debts you may have.
- CATEGORIZE YOUR EXPENSES: Divide your expenses into categories, such as housing, transportation, food & grocery, entertainment, and any other debts.
- ASSESS YOUR EXPENSES: Look at your spending patterns and identify areas where you can cut back. Some examples are- Refinance your mortagage payment, cut back on expensive coffees and lunches, Try using local transit if accessible to your work, get weekly grocery after making your daily meal plan etc.
- SET YOUR BUDGET: Based on your income and expenses, set a budget for each category. Make sure your expenses do not exceed your income. Looks easy but it is not, try using certain budgeting apps like Mint etc or nowadays you can try budgeting on your own Bank’s online App. Try this for 1 month and track your progress and then continue..
- TRACK YOUR SPENDING: Keep track of your spending to ensure you are staying within your budget. You can use a budgeting app like Mint, Koho, Google Docs etc or sometimes a simple spreadsheet to track your spending. It will create a sense of self empowerment that you are actually on the path to become financialy stable in the future.
- ADJUST YOUR BUDGET: If necessary, adjust your budget based on your spending patterns after 1 month of tracking. Remember, Consistency is the key.
- REVIEW AND REVISE: Regularly review your budget and make changes as necessary to ensure you are on track to meeting your financial goals.
By following these basic steps, you can create a budget that works for you and helps you achieve financial stability. Start budgeting today!
CSR7 Finance Tips 