76% of Americans say they regret at least one thing in their financial lives. If you regret anything, we don’t want it to be not having saved enough.
But how can you make sure you are saving enough based on your monthly income and household costs?
Don’t worry! We have your back! This article has everything you need to know about how to make a personal budget.
Add Up Your Personal Expenses
Before you can make a budget, you need to go through your bank statements, credit card bills, cash spending, and other bills to add up what you spend on a monthly basis.
Do not leave a single number out to make sure you are budgeting for everything.
Determine What You Can Cut Back On
With the number you come up with, you are creating a list of expenses. And with that, you can go through to see what you can cut back on.
For instance, you could potentially cut back on dining out, decorations for the home, and toys for your dog. You could maybe even cut back on how many groceries you buy if you see that some are going to waste by the end of each week. You can’t, however, cut back on your health insurance bill or car cost along with some other bills.
Most people don’t know that their life insurance can be one of their most valuable assets. In fact, for those that no longer want to pay premiums on their policy, a life settlement is a fantastic way to gain access to cash in times of need.
Consider Alternatives to Costs
There are few household expenses that may seem unnecessarily expensive. If that’s the case, you should go through and see what you could save money on.
Instead of buying paper towels every week, could you buy reusable paper towels and wash them instead? Instead of having to pay a crazy high electric bill, would you consider going green and adding solar panels to your home?
If so, you can discover more about solar.
Think About Savings and Investments
Based on your monthly income and household expenses, you need to think about how much is leftover for you to put into savings or invest.
While it may not seem necessary in the moment, you are saving for the future: That trip you have always wanted to go on, a future kid, and your future child’s college fund. You may even be saving for a wedding or an unexpected accident. Whatever it is, savings are vital.
While many sources say to save about 20% of your monthly income, it doesn’t need to be that high. If you can only save $100 a month, do it. The most important thing is that you save every single time you can.
And when you can, investing your money will set you up for the future as well.
Now You Know How to Make a Personal Budget
Knowing how to make a personal budget can make or break your financial situation. Once you know how to budget, you are better able to save and invest your money for the future.
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