what is the last step in creating a budget
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Step 1: Write down your financial goals.
Having goals is essential to tracking your progress.
Maybe your goals include debt freedom, building savings, or giving extravagantly. Whatever they are, take the time to think about your short term and long term goals. Write them down. These are your financial motivators.
Step 2: Record every single purchase you make, without exception.
Think of this as your budget prep.
No dollar should escape accountability. Record every dollar that leaves your pocket. Underestimating your spending is one of the greatest budgeting blunders. Knowing your spending habits will put you on the right track.
Step 3: Create your spending categories.
Here is where you will give your dollars purpose.
In addition to the obvious categories, list all larger non-monthly expenses (life insurance, birthdays, car repairs). Think of those big things that happen that you can plan for financially (property taxes, holidays, car insurance).
Don’t forget a “fun money” category or miscellaneous. You need to give yourself some breathing room.
Step 4: Hold a budget meeting (yes, with your spouse).
Budgeting is a meeting of the minds. It’s about healthy negotiation, compromise and respect. Here is where you will agree on how many dollars should be allocated to each of the spending categories.
This meeting should be short (and friendly).
Step 5: Schedule time to create your budget.
Determine the budget method and tools you will use and start your budget.
Think about your personality.You can use pencil and paper, software, envelopes, dry erase board, whatever. Just make it user friendly and, preferably, cheap.
Step 6: Tweak your budget at the beginning of every month.
Be adaptable and flexible. Budgeting should be a life long habit. Don’t quit.
Live within your means with the help of your budget. You’re sure to find financial peace of mind.
6 Steps to Creating a Budget
Write down your financial goals
Record every purchase you make
Create your spending categories
Hold a budget meeting with your spouse
Schedule time to create your budget
Tweak your budget at the beginning of every month
Having goals is essential to tracking your progress.
Maybe your goals include debt freedom, building savings, or giving extravagantly. Whatever they are, take the time to think about your short term and long term goals. Write them down. These are your financial motivators.
Step 2: Record every single purchase you make, without exception.
Think of this as your budget prep.
No dollar should escape accountability. Record every dollar that leaves your pocket. Underestimating your spending is one of the greatest budgeting blunders. Knowing your spending habits will put you on the right track.
Step 3: Create your spending categories.
Here is where you will give your dollars purpose.
In addition to the obvious categories, list all larger non-monthly expenses (life insurance, birthdays, car repairs). Think of those big things that happen that you can plan for financially (property taxes, holidays, car insurance).
Don’t forget a “fun money” category or miscellaneous. You need to give yourself some breathing room.
Step 4: Hold a budget meeting (yes, with your spouse).
Budgeting is a meeting of the minds. It’s about healthy negotiation, compromise and respect. Here is where you will agree on how many dollars should be allocated to each of the spending categories.
This meeting should be short (and friendly).
Step 5: Schedule time to create your budget.
Determine the budget method and tools you will use and start your budget.
Think about your personality.You can use pencil and paper, software, envelopes, dry erase board, whatever. Just make it user friendly and, preferably, cheap.
Step 6: Tweak your budget at the beginning of every month.
Be adaptable and flexible. Budgeting should be a life long habit. Don’t quit.
Live within your means with the help of your budget. You’re sure to find financial peace of mind.
6 Steps to Creating a Budget
Write down your financial goals
Record every purchase you make
Create your spending categories
Hold a budget meeting with your spouse
Schedule time to create your budget
Tweak your budget at the beginning of every month
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