Budgeting

Budgeting 101

Budgeting is a key part of financial planning, but unfortunately most of us don’t take the time to create a budget plan or lack the discipline to follow one. While it can overwhelming to sit down and go through all of your expenses and set limits for your spending, it’s a great way to change your financial future for the better. If you don’t know how much money you have coming in and going out, it will be much harder to get ahead and achieve your financial goals.

What is a budget
A budget shows how much money you have and where you are spending it. It’s hard to imagine becoming financially independent without keeping track of your income and expenses, and knowing where your money goes. Creating a budget will help you decide how to spend your money, pay off existing debt, and free up cash for your savings goals, such as a house or car down payment, vacations, or college.

The budget planning process includes a few basic steps: identifying your sources of income, tracking your expenses, and calculating the difference between them.

How to create a budget
The first step in creating a budget is to determine how much income you have. This should be easy and usually only requires you to take a look at your pay stubs. Make sure that you also include any other sources of income you may have, such as investment income, interest, or if you are married, be sure to include your spouse’s income as well.

How to Budget

A budget shows how much money you have and where you are spending it. It’s hard to imagine becoming financially independent without keeping track of your income and expenses, and knowing where your money goes. Creating a budget will help you decide how to spend your money, pay off existing debt, and free up cash for your savings goals, such as a house or car down payment, vacations, or college.

The budget planning process includes a few basic steps: identifying your sources of income, tracking your expenses, and calculating the difference between them.

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Budget Planner

The idea of planning a budget and sticking to it can be overwhelming to most of us. But luckily, moneyStrands makes the whole process much easier and quicker by breaking the budget planning into smaller tasks. It gives you all necessary budgeting tools so you gain a better understanding of the entire planning process and stand a better chance of creating a budget plan that you will actually follow.

Know where you stand
The biggest fear that most of us have when planning a budget is that we will need to cut back on all of the fun spending - things like dinner out or Starbuck’s coffee, or even the trip to see all college friend for the holidays. While you may find that you do need to cut some expenses after evaluating your spending habits, it is impossible to know where exactly you need to cut back without understanding your current financial situation. The first step of budget planning starts with knowing how much cash is left to spend and evaluating your current spending habits. moneyStrands pulls together data from all your financial accounts and breaks down all your transactions by specific category, so you can better track your finances and manage your budget.

Expense Tracking

The idea of planning a budget and sticking to it can be overwhelming to most of us. But luckily, moneyStrands makes the whole process much easier and quicker by breaking the budget planning into smaller tasks. It gives you all necessary budgeting tools so you gain a better understanding of the entire planning process and stand a better chance of creating a budget plan that you will actually follow.

Know where you stand

The biggest fear that most of us have when planning a budget is that we will need to cut back on all of the fun spending - things like dinner out or Starbuck’s coffee, or even the trip to see all college friend for the holidays. While you may find that you do need to cut some expenses after evaluating your spending habits, it is impossible to know where exactly you need to cut back without understanding your current financial situation. The first step of budget planning starts with knowing how much cash is left to spend and evaluating your current spending habits. moneyStrands pulls together data from all your financial accounts and breaks down all your transactions by specific category, so you can better track your finances and manage your budget.

Set realistic budget goals

The second step in budget planning is setting specific budget goals. Without setting realistic budget limits we drift along and leave our budget plan to chance. The end result can be a failure to reach financial freedom.

Evaluate your expenses; look for opportunities to economize, and develop a plan to cut back spending for specific problem spending categories. After all, successful budget planning is all about saving from your monthly expenses.

Best Budgeting Tools

One smart tip to keep you on track with your budget and bill paying, is to avoid dealing with it every single day. If you put bills in an ‘Bills Unpaid file’ you can attend to them when you have time. That is the key – you need to set aside a designated time, preferably weekly, when you will focus only on your financial matters (after payday is good when your bank account is replenished)

It may take 1-2 hours to pay personal bills and get organized. But you’ll find once you start on the task you’ll get focused. You can review your credit card statements, check, transactions, credit offers, etc. to make sure that you’re receiving the best rates, lowest cost credit options but more importantly that there are no errors.