7 Steps to Set a Monthly Budget

by | Oct 2, 2023 | Blog

One of the keys to financial well-being is having a plan and including a monthly budget. Setting a budget may sound like a daunting task but following our easy steps shows it doesn’t have to be complicated or time-consuming.

Step 1: Gather Your Financial Information

Before you can start budgeting, you need to know where your money is coming from and where it’s going. Take some time to collect all your financial statements and documents. This includes your bank statements, credit card bills, utility bills, and any other income or expense records you have.

Step 2: Calculate Your Income

Figure out how much money you have coming in each month. This includes your salary, freelance gigs, side hustles, and any other sources of income. Add up all these figures to get your total monthly income.

Step 3: Track Your Expenses

Get a handle on where your money is going. Take a look at your bank statements and bills to see how much you’re spending on essentials like rent, groceries, transportation, and utilities. Don’t forget about those little daily expenses like coffee runs and online shopping – they add up! Categorize your expenses into fixed (same amount each month) and variable (fluctuating amounts) to get a clear picture.

Step 4: Set Financial Goals

What are your financial dreams and aspirations? Do you want to save for a vacation, pay off debt, or start an emergency fund? Setting clear financial goals will give you something to work towards and keep you motivated. Be specific about what you want to achieve and give yourself a timeline.

Step 5: Create Your Budget

Now you are ready to create your budget! Start by subtracting your fixed expenses from your income. This will give you an idea of how much discretionary income you have left for variable expenses and savings. Allocate a certain amount to each category, keeping in mind your financial goals and priorities.

Step 6: Track and Adjust

Building a budget is just the beginning – you also need to maintain it. Regularly track your expenses and compare them to your budgeted amounts. This will help you stay on track and make any necessary adjustments along the way. There are many budgeting apps and online tools available that can make this process easier and more automated.

Step 7: Stay Consistent and Flexible

Remember, budgeting is not a one-time thing. It’s an ongoing process that requires consistency and flexibility. Life happens, and unexpected expenses can pop up out of nowhere. Be prepared to make changes to your budget when needed, and always stay mindful of your financial goals.
If you are wanting to beef up your monthly budget by increasing your income, Barnes Employment Group can help you find a new career.

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