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How to budget your money



A budget can help you crush your outstanding debt, take care of your financial future and even become a happier and more relaxed person. Depending on your circumstances, a proper budget may not require you to spend less. Instead, you may simply need to make more effective financial decisions.

[ Edit ] Step

[ Edit ] Budgeting Help

WH.shared.addScrollLoadItem (& # 39; 5e0cc201737c6 & # 39; ) Sample List of Expenditure
WH.shared.addScrollLoadItem (& # 39; 5e0cc201742d2 & # 39;) Example of Low Income Budget
WH.shared.addScrollLoadItem (& # 39; 5e0cc) Examples of High Income Budget [1969012] Edit ] Track your income and expenses
  1. Collect what you need to start tracking your spending history. Collect past bills, bank and credit card statements and receipts that can allow you to put together an accurate estimate of how much money you spend each month.
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  2. Consider using software to help you budget. Personal finance software is fast becoming the new trend in finance. These programs have built-in budget-making tools that can help you adjust your budget along with analytics to help you project cash flow in the future and better understand your spending habits. Some popular personal finance software programs include:
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    • Mint
    • Quicken
    • AceMoney
    • BudgetPulse
  3. Create a spreadsheet. If you choose not to use a budgeting software, you can determine your own budget by using a simple spreadsheet. Your goal is to map all your expenses and income over a year, so create a spreadsheet that clearly shows all your information so you can quickly identify all areas where you can spend smarter. [1]
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    • Label the row of cells over the top (starting with cell B1) with the 12 months of the year.
    • Create a column of spending and revenue in column A You can specify either revenue or expenditure first, but try to group spending together and revenue together to avoid confusion.
    • You may want to group expenses together with category headings. For example, you may have a category of "tools" that include your electricity, gas, water and telephone bills.
    • Decide if you want to include items deducted directly from your paycheck such as insurance, retirement savings or taxes. If you do not include them in your spreadsheet, make sure you list your net income (after deductions) rather than your gross income (total deductions) under the "income" section.

    [19659019] Document your historical budget data for the last 12 months. Add all of your spending and revenue over the last 12 months, using data from your bank and credit card details to provide an accurate representation of all your revenue and expenses.

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  4. Determine your total monthly income history. Do you have a fixed salary where you probably know how much you take home each week? Are you a freelancer whose salary varies every month? Documenting a year's history can help you get an accurate picture of your average monthly income. [2]
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    • If you are an independent entrepreneur or freelancer, remember that what you take home is not the same as what you earn. For example, you can bring in $ 2,500 each month, but that is before tax. Find out how much you are likely to have to pay in taxes and deduct it from your monthly income to arrive at a more accurate number.
    • If you are an official, do not think about any tax payment in your total income. Your monthly income should only reflect what you take home after tax. If you get a refund of taxes, you will do what you want; if you don't, you don't have to worry about it.
  5. List all your monthly expenses on the spreadsheet. What are the bills that you have to pay each month? How much do you spend each week on groceries and gasoline? Do you go out to dinner with friends every Friday night or to movies once a week? How much money do you spend on shopping? Tracking a year of actual spending will help you develop a correct picture of your starting habits, as most people underestimate the amount they think they spend each month. [3]
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  6. Analyze your income and expenditure. If your spending is greater than your income, you live well beyond your means. Your budget should be divided into two groups:
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    • Fixed Expensions . These include regular monthly expenses such as bills, insurance, loan debt, food and essential shopping items such as clothing and household goods.
    • Discretionary Expenses . Discretionary expenses are unallocated expenses that may be "optional." Items that fall into this category include savings, entertainment, vacation funds and other luxuries.

[ Edit ] Create your budget [19659014] Create a preliminary budget. The history set out in Part 1 will help you create a correct preliminary budget. You should calculate your fixed expenses and income and then decide how you want to spend your discretionary money.

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  • To calculate fixed expenses, take an average of each month for the past year then add about 5%. For example, if your electricity bill varies seasonally but averages $ 210 per month, you should calculate the bill to $ 220 per month.
  • Be sure to report changes in fixed expenses, such as paying off a student loan or adding a payment for a new car.
  • Set goals for the bulk of your discretionary spending. Now that you have decided how much discretionary money to keep each month, decide how you want to spend that money. Your goal should be clear, clear and actionable. Some short-term goals can be:
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    • Save $ 8,000 in an emergency savings fund
    • Put 5% of each paycheck on a savings account
    • Pay credit card balances in 12 months
    • Save $ 6,000 for an Anniversary Holiday
  • Maximize Tax Benefits. There are ways to save money that can provide tax benefits. If you deposit money directly from your paycheck into a 401 (K) or personal IRA, the money can be deducted before being charged with taxes. Some companies even offer partial matching for pension contributions, which can make your savings go even further.
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  • Budget the rest of your discretionary spending. This part of your budget is about identifying values. What values ​​do you have and how do you want to spend your money to realize them? Money is a means to a goal, not a goal in itself.
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    • What kind of person are you and what do you want to do? Many people stop spending money on hobbies, interests or charities. Think of this as investing in an experience or a feeling of satisfaction.
    • Think about what makes you really happy. One popular theory is that people who spend money on experiences are actually happier than people who spend money on property. [4]
    • Consider setting aside more money for travel and vacation.
  • [ Edit ] Becoming a Budget Pro

    1. Stick to your budget and do not overspend. This is the first rule of budgeting and pretty much the only one. It sounds pretty obvious, but it's easy to go over budget, even if you have one in place. Think about your spending habits and what your money is going towards. [5]
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    2. Try to reduce your spending. Higher spending can be the most uncomfortable but most effective way of staying within a budget. If you are taking an annual vacation, you may want to consider staying home this year. Smaller spending can also increase.
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      • Try to identify and cut down on any expensive luxury that you like. If you like a massage every week or prefer expensive wine, you can reduce the frequency of these treats so that you spend money on them only once a month or once every two months.
      • Save money on smaller expenses by switching to generic brands and eating home more often. Try not to go out and eat more than once or twice a week. [6]
      • See if you can reduce some of your fixed expenses by switching to a cheaper mobile phone plan, reducing your TV package, or improving your home's energy efficiency.
    3. Treat yourself at regular intervals, but for a reason. Your money must work for you, not the other way around. You do not want to feel like a slave to your budget or to money in general, so it is important to allow yourself a little treatment each month that does not break your budget.
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      • Don't abuse your own reward system to the point where it becomes counterproductive and stops affecting your budget. The idea is to treat yourself with smaller, cheaper items like a latte or a new shirt and to avoid spraying on more expensive items like a vacation or an expensive pair of shoes.
    4. Pay credit card balances every month. If you use credit cards, you should try to keep them on a zero balance each month to avoid costly fees. If you are unable to pay off the current balances, prioritize paying them out within a reasonable period of time so that you can get to zero balances.
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      • Try to switch to cash payments for most weeks purchases – especially "extra" like eating out or in a cafe. This can help you control your spending, as people are more aware of the money they spend when using cash than when you swipe a card.
    5. Lower your taxes. Take better advantage of itemized deductions when you register your taxes each year.
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      • Start keeping your receipts, especially if you are an independent contractor and work from home or remotely. There are many amenities you can pay as part of your contract work when you do your taxes. [7]
      • It is a good idea to explore ways to get a better tax payment as an entrepreneur or ask your accountant how you can get a better refund.
    6. Please appeal your home judgment. If you are a homeowner and have sufficient proof, you may be able to lower your property taxes by challenging the value that a homeowner puts on your property.
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    7. Do not count on windfall. Do not think about potential (uncertain) sources of income, such as bonuses at the end of the year, inheritance or tax refund. You just want to include guaranteed money in your budget.
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    [ Edit ] Tips

    • Save your loose change in a jar and then take it into the bank to be rolled. You will be amazed at how your little change can add up. [8]
    • Avoid debt in the form of high interest credit cards and payday loans, as they will incur high interest rates and in the end you will cost a lot of money, especially if you are struggling to pay off your bill on time, every month. [9]

    [ Edit ] Related wikiHows

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    • The college's tuition and loans using Excel
    • Use an app for budgeting while grocery shopping

    [ Edit ] References

    [ Edit ] Quick overview

    1. https: // www.bankofamerica.com/deposits/manage/creating-a-budget.go
    2. https://www.bankofamerica.com/deposits/manage/creating-a-budget.go
    3. [1945 https: //www.bankofamerica.com/deposits/manage/creating-a-budget .go
    4. http://www.psychologytoday.com/blo g / ulterior-motives / 201303 / why-are-experiences-often-better-purchases-things
    5. [1945 http: / /www.learnvest.com/knowledge-center/your-ultimate-budget-guideline- the-502030-rule / strong19659109vard ↑ https://www.bankofamerica.com/deposits/manage/creating-a- budget.go
    6. http://www.learnvest.com/knowledge -center / your-taxes-if-your-a-freelancer /
    7. http://americasaves.org / for-savers / make-a-plan-how-to-save-money / save- on-a-tight-budget
    8. http://americasaves.org/for-savers/make-a-Plan-how-to-Save-money / save-on-a-tight budget [19659108]
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