We all know that having at least a basic budget or spending plan is important to keep our financial affairs in order. But what if you’ve gotten away from it? What steps should you take to get back on track and identify any spending leaks?
Keep it basic. Here are 4 easy steps that can help you get your budgeting skills back on track.
1.) Write it down. Take an inventory of all your monthly income, bills and expenses. Add up your income and debts. Subtract your debts from your income. What is the result? This exercise will show you where all of your money is going. Hopefully it helps you identify spending leaks.
2.) Track your transactions. Keep your receipts and watch your account like a hawk during the next month. The more diligent you are in keeping track of where your money is going throughout the month, the easier the next step will be.
3.) Analyze your spending. Categorize all of your transaction from the previous month and take a hard look to see where your money is actually going. You might be happy with the result! Or, you could be looking for ways to cut spending. Having a detailed transaction history will help you if a spending cut is needed.
4.) Repeat. Repeat steps 1 through 3. Do this to continuously optimize your budget. Each time you repeat the cycle you’ll be saving more money!
Budgeting can become very complicated, but it doesn’t need to be. Keep it simple and stay committed to the process and you’re sure to save money. You can find a monthly income and debt inventory sheet here, it will help get your started!
