Creating a monthly budget that aligns with your financial situation and goals is something that I have always stressed the importance of. Having some form of budget is imperative for many reasons – it helps you keep track of the money going in and out of your bank account, it ensures that you’re able to cover your day-to-day expenses as well as save for large financial goals and emergency expenses, and, most importantly, it promotes financial literacy. Nonetheless, most people don’t even know where to begin when it comes to starting a budget and planning for their financial future. In this blog post, I will be teaching you the basics of budgeting, from what to gather, future savings, and investing, all with the goal of home ownership in mind.
In order to create a budget that’s perfect for you, we need to define what exactly “budgeting” means. Many people consider budgeting to be just a list of the bills one has to pay. While this is indeed an element of budgeting, it’s not the whole picture. An actual budget is a limitation on the amount of money that is spent within a designated time frame. For the purposes of this article, we will be creating a monthly budget.
we need to get three months of our spending on paper. It’s important to look at all accounts when it comes to this step – for example, if you’re married and you and your spouse have both joint and separate accounts, you need to look at spending in each of those accounts. Once you’ve done this, you’ll need to categorize each expenditure into these categories:
When categorizing your budget, it’s essential to ask yourself what falls under survival versus lifestyle. For example, eating out at a restaurant would be considered a lifestyle expense, whereas going to the grocery store would be a survival expense. If you’re not quite sure what category an expenditure would fit under, ask yourself – do I literally need to spend this money in order to eat, have a roof over my head, or have transportation to work? If yes, it’s a survival expense – but if no, it’s a lifestyle expense.
If you’ve never budgeted before, it may seem daunting to just live off of that 70%. Here are some of the ways that you can cut down on unnecessary expenditures to get to where you need to be in terms of your budget:
However, it’ll be well worth it to reach your financial goals! I hope that this article has inspired you to create a budget and take tangible action towards your monetary aspirations. If you have any questions or want to join me and countless others on this budgeting journey, be sure to follow me on my social media channels and continue to read my blog for further financial tips and tricks!
Loan Officer at CrossCountry Mortgage, LLC
Personal NMLS290507 Branch NMLS1754567 Company NMLS3029
Office: 177 Military East Benicia, CA 94510 Phone (510) 816-2904 Email firstname.lastname@example.org
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