A budget is a month-by-month plan to help you see where your money goes. Budgeting helps you to achieve both your long-term and short-term goals. When it comes to creating a personal budget that fits your lifestyle, keep in mind some basics to start you off in the right direction.

The first step is to identify how much money you have coming in each month. Use Excel to create a budget worksheet that will help you determine your net income after deductions such as Social Security, taxes, or 401(k) contributions.

Next, start to diligently record your daily spending habits on a smartphone app or with good old pen and paper and transfer that to an Excel spreadsheet. Break it down into categories so that you know exactly where your money is being spent. Note what your fixed expenses are such as mortgage payments or rent, car payments, utilities, health, auto, life, and homeowner’s insurances. The variable expenses that change month to month usually involve items such as gas and groceries. Expenses such as your daily lattes, restaurant meals, and movies need to be added in as well as they tend to add up rather quickly.

Once you have a clear picture of your expenses, think about your financial goals by identifying your priorities like savings, paying off debt, and retirement. Identify what your “wants” and “needs” are.

Now set it in motion by making a plan of action for yourself. You know your fixed and variable expenses do not change much each month. Use your past spending habits as a guide and plan for each month for the entire year. Take into account that birthdays, holidays, and other special occasions come up which you may want to set money aside for as well. Adjust spending as necessary to meet your goals.

Lastly, make a budget which is realistic for you. Is it doable? Re-evaluate your budget as needed and make any necessary adjustments to keep it working for you.

Remember that small savings add up to big savings over time, and you can meet your goals!

Interested in learning more about what steps to take to increase your financial understanding? Join Kia’s eChapter, Her Sensible Budget, at https://bit.ly/31lxrkb for tips to transform your financial future.

About Our Author

Kia Wells

Subject Matter Expert at Her Sensible Budget
Kia Wells is passionate about the field of Accounting/Finance and assisting others in changing their lives. She has conducted workshops training organizations and individuals on the importance of credit repair, budgeting properly, debt elimination, bookkeeping and other topics over the past 6 years. Kia is a mother of three sons. In her spare time she enjoys reading, community involvement, and encouraging others to always love who they are no matter what.
Kia Wells
 

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