How To Budget Money And Improve Your Money Habits

Budgeting. The nine-letter word in personal finance either excites you or conjures up images of torture. 

Regardless of whether you’re excited, terrified, or lost somewhere in between, there’s something we can all agree on here.

It’s that budgeting exists for one simple reason—because it works. But exactly How to Budget Money so you can reach your financial goals and enjoy life? This is the Way. 

Totalling your income

As you start adding up your income, keep in mind that any amount of money coming in from any source is considered your income.

Totalling your expense

When you begin examining your expenses, start by dividing them into two types of spending/expense categories: fixed costs and variable costs. You might commonly see others split this up into wants vs. needs.  

Let’s calculate!

By minus your total expenses from your total income, you’ll arrive at a number that’s either in green or red, so to speak.

Based on the numbers above and whether you’re in the green or red, you’ll be able to create a spending plan according to your priorities.

Create your spending plan 

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