Track your spending to gain a better understanding of your overall financial situation. This step is imperative in order to determine an accurate budget based on after-tax income.
For at least one month, write down all your purchases (or list in a spreadsheet) and keep an inventory of where you spend the most. Start thinking of ways you c
Track your spending to gain a better understanding of your overall financial situation. This step is imperative in order to determine an accurate budget based on after-tax income.
For at least one month, write down all your purchases (or list in a spreadsheet) and keep an inventory of where you spend the most. Start thinking of ways you can reduce your spending in some areas. These funds can be reallocated to your "SAVINGS".
Create your budget by allocating your income among your needs (50%), wants (30%) and savings & debt repayment (20%).
1. Determine your after-tax income, adding back any payroll deductions for retirement saving.
2. Choose a budget planning system (Envelop system or zero-based).
3. Track your progress.
4. Automate your savings or create a routine.
5. Revisit and adjust as needed.
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