Master the fundamentals of personal budgeting
A budget is a financial plan that helps you track your income and expenses over a specific period. It's the foundation of good financial management and the first step toward achieving your financial goals.
Creating and sticking to a budget allows you to understand where your money goes, identify unnecessary expenses, and ensure you're saving enough for your future goals.
All money you receive regularly, including salary, freelance work, investments, etc.
Everything you spend money on, categorized as needs or wants.
Money set aside for future goals, emergencies, or investments.
The difference between income and expenses. Positive = surplus, negative = deficit.
Allocate your after-tax income as follows:
Every dollar of income is assigned to a specific expense or savings category, leaving zero unallocated.
Allocate cash into envelopes for different spending categories. Once an envelope is empty, you stop spending in that category.
Record every expense, no matter how small.
Check your budget weekly or monthly.
Set achievable goals based on your lifestyle.
Life changes, so should your budget.