In this episode of Becoming Super Podcast, Scott and Angelica discuss 5 simple steps that you can take NOW to create a budget, take control of your finances, and achieve your financial goals.
1.Review your last 3-6 months of expenses.
Print out your bank statements and go line by line. I like to use 3 highlighters and categorize based on the following categories:
2.Determine your ESSENTIAL expenses, about 70%
These are your necessary expenses to live – rent/mortgage, utilities, insurances, car expenses, groceries, etc.
You can break these down further into fixed (like rent, insurances) and flexible (like groceries, electric).
3.Allot 15% to your ENDGAME
Anything that is for your future – savings, investments, 401ks.
4.The last 15% is your EXTRAS
Anything that is not required. These types of expenses vary by person, but could include things like shopping, going out to eat, pets, gym memberships, travel.
5.REVIEW it regularly!
This is the part where people get tripped up – they forget to regularly review their expenses! At least once a month (I like to do it weekly on Sunday evenings) review your transactions and update your budget spreadsheet. You can keep track of areas you tend to go over (online shopping anyone?), and see where you can reallocate funds to reach your goals.
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