Budgeting basics

Put a little away for a rainy day!

Are you having a hard time making your money last until the end of the month, or putting a little aside for the future? Creating a budget may help.

A budget is a plan to help you keep track of your money, and give you a clear picture of where your money is going. The goal is to make sure that you don't spend more than you earn. This way you can avoid debt and maybe even free up some money to save.

To create a budget, start by looking at your expenses over at least a month. This includes even small items, such as snacks and coffee. Once you've done this, divide your expenses into two categories: fixed and flexible. Fixed costs are things like monthly rent and utilities. Flexible costs are things that you spend money on, like clothing and food.

Now, once you've listed your expenses, take a look at whether the money going out is more than the money coming in. If that's the case, you need to prioritize your non-essential expenses, things like going to the movies or eating out.

After adding up all your expenses, if you've got money left over, try putting away even just 10% of your income. Knowing that you have savings tucked away for your future or for unexpected expenses is a great way to know your budget plan is working for you.

Was this information helpful?