How to BUDGET:
Step 1: Determine your monthly expected income
The first step in budgeting is determining your monthly income. If you only have one salaried job, this information will be on your paystub—it's the amount you take home per paycheck. You multiply your paycheck by two if you get paid on the 15th and 30th of each month. If you are paid biweekly, multiply your paycheck amount by 26 and then divide by 12.
If you have more than one job, have an irregular income, or you’re self-employed, the process for determining your net income (which is different from your gross income) is a little different.
Step 2: List all your fixed expenses
Fixed expenses are those that do not change from month to month. Rent, car payments, student loan repayment, internet and phone bills, credit card debt payments, automatic deposits into a savings account, and insurance are examples. Write them down on paper, fill out a budget worksheet, or create a budget spreadsheet—whatever feels most comfortable.
Step 3: Total your fixed expenses
Determine how much you spend each month on fixed expenses by calculating the figures. Because this figure is unlikely to change significantly from month to month, you can use it as the foundation for your monthly budget. Subtract your total fixed expense spending from your net income to determine how much money you have left over for variable expenses.
Step 4: List all your variable expenses
Variable expenses are monthly expenses that vary, such as groceries, restaurants, shopping, fitness classes, and gifts. Check your receipts, online banking, and credit card statements to estimate your variable expenses (and don't forget about apps like Venmo and PayPal!). Make a list of everything you spent money on last month that wasn't a fixed expense. Even though these figures will change month to month, starting with the previous month's purchases should provide you with a good estimate of your spending habits.
Step 5: Total your variable expenses
Add up all your variable expenses and add that number to your total spending on fixed expenses. Is that number more or less than your total net income? If it’s more, you’re living above your means.
Step 6: Break your monthly expenses down into categories
Sort everything into categories now that you have your lists of fixed and variable expenses. To learn more about your specific spending habits, it can be useful to use both broad categories, such as "food," and specific subcategories, such as "restaurants," "groceries," and "coffee."
Step 7: Evaluate your spending habits
Total your spending in each category. Divide your total spending per category by your net income and multiply by 100% to find out what percentage of your income you spent on each category. Looking at percentages can help you figure out how much of your money is going where.
Step 8: Check in with your financial goals and adjust
Once you've laid out your spending, it's time to revisit your financial goals and make changes to your budget. Determine where you can cut back if you're spending more than you make.
Variable expenses are easier to reduce than fixed expenses; even so, if you are significantly overspending on fixed expenses, it can be difficult to compensate. Consider a less expensive housing option, such as living with roommates, if you are overspending on rent.
If you have money left over at the end of the month, that means you can allocate more money toward savings
TLDR:
Use mint budget app
play.google.com
Step 1: Determine your monthly expected income
The first step in budgeting is determining your monthly income. If you only have one salaried job, this information will be on your paystub—it's the amount you take home per paycheck. You multiply your paycheck by two if you get paid on the 15th and 30th of each month. If you are paid biweekly, multiply your paycheck amount by 26 and then divide by 12.
If you have more than one job, have an irregular income, or you’re self-employed, the process for determining your net income (which is different from your gross income) is a little different.
Step 2: List all your fixed expenses
Fixed expenses are those that do not change from month to month. Rent, car payments, student loan repayment, internet and phone bills, credit card debt payments, automatic deposits into a savings account, and insurance are examples. Write them down on paper, fill out a budget worksheet, or create a budget spreadsheet—whatever feels most comfortable.
Step 3: Total your fixed expenses
Determine how much you spend each month on fixed expenses by calculating the figures. Because this figure is unlikely to change significantly from month to month, you can use it as the foundation for your monthly budget. Subtract your total fixed expense spending from your net income to determine how much money you have left over for variable expenses.
Step 4: List all your variable expenses
Variable expenses are monthly expenses that vary, such as groceries, restaurants, shopping, fitness classes, and gifts. Check your receipts, online banking, and credit card statements to estimate your variable expenses (and don't forget about apps like Venmo and PayPal!). Make a list of everything you spent money on last month that wasn't a fixed expense. Even though these figures will change month to month, starting with the previous month's purchases should provide you with a good estimate of your spending habits.
Step 5: Total your variable expenses
Add up all your variable expenses and add that number to your total spending on fixed expenses. Is that number more or less than your total net income? If it’s more, you’re living above your means.
Step 6: Break your monthly expenses down into categories
Sort everything into categories now that you have your lists of fixed and variable expenses. To learn more about your specific spending habits, it can be useful to use both broad categories, such as "food," and specific subcategories, such as "restaurants," "groceries," and "coffee."
Step 7: Evaluate your spending habits
Total your spending in each category. Divide your total spending per category by your net income and multiply by 100% to find out what percentage of your income you spent on each category. Looking at percentages can help you figure out how much of your money is going where.
Step 8: Check in with your financial goals and adjust
Once you've laid out your spending, it's time to revisit your financial goals and make changes to your budget. Determine where you can cut back if you're spending more than you make.
Variable expenses are easier to reduce than fixed expenses; even so, if you are significantly overspending on fixed expenses, it can be difficult to compensate. Consider a less expensive housing option, such as living with roommates, if you are overspending on rent.
If you have money left over at the end of the month, that means you can allocate more money toward savings
TLDR:
Use mint budget app
Mint: Budget & Track Bills - Apps on Google Play
Keep track of your personal finances and manage subscriptions with Mint!
