Skip to main content

If you are having a hard time making your money last until the end of the month, or finding it hard to save anything for the future, creating a budget may help.

A budget is a plan to help you keep track of your money, and can give you a clear picture of where your money is going. The goal of a budget is to make sure that you don’t spend more than you earn. This way you may avoid debt and maybe even free up some money to save. To create a budget, start by looking at your expenses over at least a month. This includes even small items such as snacks and coffee.

Once you’ve done this, divide your expenses into two categories: fixed and flexible. Fixed costs are things like rent and utilities — things that are necessities and occur every month. Flexible costs are things that you spend money on – like clothing – but may vary each month.

After you’ve listed your expenses, take a look at whether the money going out is more than the money you have coming in. If that’s the case, you need to prioritize your non-essential expenses, things like going to the movies or eating out. That additional cost of buying lunch everyday can add up to a notable sum at the end of the month.

And after all of your expenses, if you’ve got money left over, try putting away even just 10% of your income. Knowing that you have savings tucked away for your future, or unexpected expenses is a great way to know your budget plan is working for you.