Discover 8 things every successful budget has.
You can have brighter days if you’re not constantly worrying about money. Building a successful budget is one way to do that. Whether you have never created a budget before or not sure if you have the right budget, use the guide below to form a better budget and succeed at saving.
1. Use the right spending categories.
Downloading a budget worksheet makes creating a budget easier, but the default categories they provide might not fit well with your spending habits. To build a successful budget, you will need to create a budget that focuses on expense categories that apply to how you spend your money.
2. Breakdown your spending.
To successfully stay within your budget, you will need to know exactly where your money is going. Don’t make your spending categories too broad, or you won’t be able to see all the ways you can save. For example, if you have one category for food, you won’t be able to track the amount of money you spend on groceries versus dining out.
3. Know your income.
A successful budget relies on an accurate income projection. Only include steady income. For example, if your employment includes tips, try to create a budget on your salary alone, as you can’t guarantee you will make a certain amount from tips. If you do include tips, take your average from the past 90 days. Don’t forget to take out taxes and any other deductions.
4. Don’t forget irregular expenses.
Not all expenses are charged monthly. You may have charges that come through only once a quarter, twice a year or annually. This can cause issues if you don’t plan for them. Take into account car maintenance charges as well.
5. Budget for savings.
Most Americans don’t have a savings account or emergency fund. This can cause you to overdraft or go into debt if the unexpected happens. Make sure to include a line for savings in your budget to plan for a rainy day.
6. Track cash spending.
Many people forget to account for cash spending in their budget. It’s easy to lose track of what you spend your cash on. If you do take out cash regularly, create a cash category on your budget sheet to account for this spending.
7. Include goals.
Is there a financial goal you’re trying to reach? Are you saving up for a big-ticket item? Include this on your budget sheet.
8. Plan regular reviews.
It’s important to review your budget consistently and update it as necessary to create a successful budget. Spending shifts as your needs change. Not adjusting for these changes can cause financial difficulties.
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This post is not intended to be a solicitation for a loan. BrighterPays provides these blogs for entertainment and informational purposes only. Remember to consider all your financial options before making any decisions related to credit.