Budgeting 101: The Basic Tips to Improve Your Finances
Budgeting 101: The Basic Tips to Improve Your Finances
August 8, 2021 by Todd Kunsman
One of the best ways to start improving your finances and master money management is through the basics: budgeting 101. While it might not be the most fun to calculate your numbers and figure out how to spend and save money — it’s also critical early on in your journey.
By understanding and creating a personalized budget, you take control of your money and create a roadmap that will help you succeed now and in the future.
But what are the budgeting basics? How do you get started and are there different types of budget styles?
Don’t worry, I’ll cover everything you need to know in this budgeting 101 guide below.
What Is A Budget?
A budget is a plan that helps you manage your income, current expenses, and helps you save for your goals over set periods of time. With a budget, you have a plan for your spending and understand where your financial health currently stands.
Some people prefer to create a budget via writing it down on paper, while others like using an Excel spreadsheet or a personal finance app or software. For example, creating a budget calendar is a solid option.
Who should be budgeting?
Budgeting is an important tool for every person who’s earning and spending money (so pretty much everyone). It’s an activity that helps you remain in control of your money, stay on track with your goals and keep away from financial stress.
And understanding budgeting 101 will help you improve your relationship with money and offer you an accurate picture of your financial life. It’s a tool to help you get out of debt, save for your future and be prepared for any unexpected challenges.
Often people assume they know their current finances and how much they are spending. I also felt that way a few years back. However, when I really sat down and looked at the numbers, I was way off and surprised at the amount of wasteful spending I was engaged in.
Budgeting for Beginners Basics
If you’re a budgeting beginner, here are some of the steps to help you get started in the world of budgeting. Naturally, you can build a more complicated and in-depth budget — but keeping it simple can also improve your finances significantly.
1. Calculate monthly income
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