Feel like your finances are spiraling out of control? Not sure where your money is going each month? Are you sick of living paycheck to paycheck? Do you want to become financially independent? If you answered YES to any of these questions, you need a plan. And every good plan starts with a budget.
What is a Budget?
A budget is a spending plan for your money. Having a budget helps you determine how much money you have and what you want to spend it on. Sticking to a budget also ensures that you always have money for the things you need, like rent or groceries. A budget can also help you work your way out of debt.
How Do I Build a Budget?
Evaluate your wants and needs. A need is something that is essential to your daily life. That can be your mortgage, medication, groceries, schooling, etc. A want is something you like but can live without. This could be a trip you want to go on or a new pair of shoes. While fun, wants sit low on the priority scale.
Needs and wants are different for everyone. They also change over time. Only you can establish the difference between the two for yourself. For example, if you live downtown and have easy access to public transit, a car might be a want. However, if you live in the suburbs and are a long way from work, you might need a car to get back-and-forth.
Next, determine how much money you bring in and how much money you spend. You’ll need your latest pay stub, receipts, and a list of all the bills you pay each month. If you were able to save money, include that in your calculations. Be sure to include if you had to borrow money to get through the month.
Then, plug your numbers into a Budget Calculator.
Ask Yourself the Hard Questions
People often avoid building a budget because it can be hard to face reality. Asking the tough questions is scary. Giving up the things we want is never fun. But if financial independence and a hopeful future is something you want, a budget is a necessary first step in achieving those goals.
Are there expenses in the want category that you can cut out? Are you spending money on non-important items? Where can you begin to make some sacrifices? What are your long-term goals? All these questions can help you determine what your budget should look like and what the future holds.
How Do I Stick To My Budget?
The best way is to just keep track of your money. Continue to list your expenses each week. Keep all your receipts and add up your total spend. Make sure it matches the budget you’ve set up for yourself. Are you able to save any money or put money towards debts? If not, it might be time to rework the budget and cut out some more expenses.
The most important thing about budgeting is tracking every dollar. Knowing where your money is going each month can help you determine how to keep more of it for the things you want in life. Financial freedom is often found within an organized budget.
Budgeting Can Help You Save
A bank account that works for you can help make the budgeting process a lot easier. It can also help you save money. The Cashco Financial Jumpstart Savings Account is a free savings account designed to help everyday Albertans get control of their finances. The account has no monthly fees and offers automatic saving transfers. We also give you a $10 bonus as soon as you sign up.
The Jumpstart Savings Account is perfect for Albertans who are serious about building a budget and sticking to it. The account basically does the saving for you! You don’t have to waste your money on high fees. There is no credit check to sign up, either. Even better? A Cashco Financial Savings Expert will sit down with you and help you build a plan, and budget, for a brighter future.