![]() ![]() ![]() ![]() Are there any personal budget apps?Īnother smart way to build and manage your personal budget is to use a budgeting app. Check out this personal budget calculator based on the 50/30/20 method of increasing savings, paying down debt and managing your money within distinct categories of wants and needs. Other available tools use a specific methodology to split out your spending and saving. Try this free budget calculator as an example. You can work through the steps above alone – or try out one of the helpful online tools to walk you through the process of creating your own household budget. And if you’re working on a budget for a particular goal, like saving for a new car, you can now start to look at ways to cut outgoings and therefore give your savings a boost. ![]() If you find there’s a shortfall, you might want to cut down some aspects of discretionary spend, or look for ways to increase income. If you discover your incomings more than cover your projected spending you may choose to adjust your budget to include more savings. This is the final – but arguably most important – stage. Adjust your budget to suit your needs and your goals Now you know how much money is coming in, and how much you need – or want – to spend and save. Compare your income against your outgoings Variable expenses on the other hand, may require you to come up with some average amounts, and make tweaks to other aspects of your spending as you work through your budget later. When you’re working through this stage you’ll find it helpful to note which of your list of outgoings are fixed, which are variable, and whether or not something is discretionary.ĭiscretionary spending is something you could cut if you need to – which is useful to know when you come to adjusting your final budget. Don’t forget to include these costs when creating your master list of outgoings. Some spending, however, may happen less frequently – buying gifts for Christmas or birthdays, or replacing items of furniture or household appliances for example. You may do this by looking at your bank statement and noting the payments you’ve needed to make over the last month or two. Next you need to know what money you’ll need to spend each month. Find and list out unavoidable outgoings – noting if they’re variable or fixed Many people choose to create a monthly budget, to fall in line with rental and salary cycles – that means that coming up with a monthly income figure is the best idea. Add together any sources of income you have, such as your salary, any benefits or regular payments from elsewhere, income from your side hustle, rental properties and so on. Your first step is to work out what money is coming in. Use actual numbers – rather than estimates – wherever possible in your final budget. Financial statements can include bank statements, spending receipts, utility bills and pay-checks for example. To make sure you have everything you need, it may help to track your spending for a period of time – a month or two should be enough – and gather any financial statements you can. Your household budget will only be meaningful if it is calculated using accurate information. Gather as much of your own financial information as you can Here are some broad steps you’ll need to take to come up with your own personal budget: 1. You may find you need to adjust your budget over time to stay on top of changes to your spending and income levels – which you can only do if you’re tracking your finances consistently. It’s important to note that a personal budget is only useful if it’s based on accurate information, and maintained regularly. We’ll walk through the steps you need to build a budget for yourself in just a moment. Discretionary spending covers things like entertainment and even savings – these are your wants, rather than your needs. Outgoings can fall into different categories – fixed costs which are unavoidable and pre-set, variable costs, and discretionary spending. In broad terms, building a budget requires you to analyze the total amount of income you have, and set that off against your outgoings. However, a budget doesn’t have to be at all restrictive – it can just be a tool to make sure you’re understanding and tracking your spending effectively. You might have a budget for a specific reason – to pay down debts or save for a big purchase for example – which is aimed at cutting outgoings and maximizing savings. When it comes to a personal budget – or a household budget if you’re creating one for your whole family – we’re usually talking about a financial plan which looks at how much money is coming in, against your spending requirements and saving goals. A budget is a planned forecast of income and expenditure, based on past spending and upcoming needs. Individuals, households, companies and countries can all have budgets. ![]()
0 Comments
Leave a Reply. |