How To Set Up Your Personal Budget
A personal budget is a game-changer for your financial wellness.
It’s the best way to take charge of your spending, get a good look at your income, and set some financial goals for now and far into the future. To top it off, it’s easy to set up. Creating a budget should never be stressful and overwhelming.
5 Simple Steps For Creating An Effective Personal Budget
1. Collect All Of Your Financial Information
The first step to crafting a personal budget is to make sure you know everything about your current financial situation. Access your bank accounts online or collect paper statements for the past year or so.
Be sure to include all accounts, including checking and savings information as well as credit cards. If you can, get your credit score and make note of any retirement accounts, 401(k)s, or investments.
2. Outline Your Income And Expenses
The next and among the most vital steps for creating a personal budget is writing out all of your income streams in a given month. This includes income from full-time and part-time jobs as well as any additional forms of income from side hustles or other small jobs.
Include other potential sources such as child support or unemployment checks.
Next, outline all of your estimated expenses in a typical month. Some of these may be fixed bills, such as a mortgage or rent, or subscriptions to television streaming services or magazines.
Others may be variable, such as utilities like gas and electricity, as well as the amount you typically spend on food and entertainment. To set financial goals and get a refined understanding of your financial status, it may help to tag each expense as essential or non-essential.
3. Double-Check Your Monthly Expenses
While it may be easy to note your fixed expenses, a personal budget needs all of those extra expenses throughout the month that are easy to forget. Include the usual amount you spend on such items as gas, clothing, school supplies, and more.
It may also include such regular bills as medical care and credit card payments.
4. Do Some Simple Math
Once you’ve got your expenses and income squared away, subtract your expenses from your monthly income. If you are regularly spending more than you make in a month, it’s time for some major changes. Look at ways to cut back, starting with nonessentials.
If your number is more than zero, this is technically extra money you have on hand each month. See if this number is where you would like it to be to meet some of your goals. Is this amount going to a specific account, such as savings or an emergency fund, or is it being used to pay down debt such as student loans or credit card balances?
Look over your personal budget and see if you’re in a good place to meet your goals in the time frame you’ve established for each.
5. Commit To A Personal Budget
You’ve done the hard part — creating your new budget. Now all you have to do is make sure you keep track of both your expenses and income, adjusting along the way to fit in with any new goals you want to set.
New goals can be everything from adding more to your savings each month (consider an automatic savings plan each month through your bank) to buying a new car, traveling, or targeting some big debt totals.
One option is trying the popular 50/30/20 budget approach. With this personal budget plan, you shoot for spending 50% of your income on essentials, leaving 30% for all nonessentials and the remaining 20% going toward savings.
For Extra Help In An Emergency, Consider A Payday Loan
A carefully crafted personal budget can go a long way to securing your financial freedom. But at some point, in most people’s lives, there is a financial emergency to cope with. Such issues often come out of the blue, such as a visit to the emergency room or a pressing car repair.
To stay on the right track with your new personal budget, consider the option of a payday loan. A payday loan is designed to help with financial emergencies between paychecks and it can take as little as 30 minutes to qualify for up to $500 in a payday loan at Utah Title Loans, Inc.
We’ve made the payday loan process easy. On our homepage, complete the short payday loan with some basic details and we will give you a quick call to discuss the next steps. Once you qualify and are approved, you can get the help you need as soon as the same day.
Get Started Today!
Creating and maintaining a personal budget is key to getting your financial house in order. Don’t let a financial emergency shake your foundation. Pursue a payday loan today by starting on our homepage, giving us a call, or visiting a Utah Title Loans, Inc. location near you.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.