Making A Budget

By | September 30, 2013

Now that you see exactly what comes in and out of your bank account each month, plus what you owe, you have a better idea of your household budget. Now comes the fun part! Figure out what areas you could be saving in. Figure out how much money you have to allocate towards paying off your debts. Make a list of every expense and what your new budget will be. Keep in mind these general guidelines for how you should spend your paycheck:

Housing and Bills 60%
Housing Bill 30%
Household Bills 30%
Other Bills 30%
Savings 10%
Cash and Household Expenses 30%
Long Term Savings / Investment 5%
Crisis Fund / Savings Account 5%

Take your list of expenses and subtract the total from your income. Do you come out ahead? If not, you need to reorganize. If so, what will you do with your extra cash? Paying off outstanding debt should be the first priority. Next, saving for the future is very important. If you feel like you can, reward yourself for sticking to your budget! Set a little aside each month for something you really want to buy, but shouldn’t or something that you’ve cut out of your budget. Saving towards the one meal you eat out will make it taste that much better when you get it!

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