When I first got a job, and got my paycheck, I would almost instantly be spending the money whether it was on video games, shoes, food, etc. I had a small idea of saving money but honestly, saving money for retirement planning or budgeting to buy a house or car just seemed so far away in high school that I never really considered it important to save money. I had yet to learn that budgeting could be useful for more than just a retirement fund. It could be about trying to help prioritize my wants and make plans on how to achieve them, saving for an emergency or a rainy day. So is how I got started.
Keeping track of your monthly expenses will help you understand how much money you start with at the beginning, what you do with the money throughout the month, and how much you have left at the end. Tracking it can also enable you to see the categories in which you spend your money, and you may be surprised to find out just how much you spend on shopping, or food, or any number of things. I personally was shocked to find out how much money I was spending on subscriptions, ten dollars here and there added up really quickly. I ended up cancelling three subscriptions, saving me around 30 a month.
Now that you know what you’re currently spending your money on, it’s time to focus on how you want to be using your money in the future. So, whether it’s paying off the student loans, saving to try to rent a place, or traveling to another country, create an amount you want to spend on that goal. Then decide the importance of the goal which will impact how much money you want to currently spend on that goal. If you are saving for a 5,000 dollar down payment on a car, if you save 500 towards that goal every month, then you will have it in 10 months. But if you determine that it’s far more important and you want to put a grand every month, then your car will come much earlier, but your other goals may suffer. Creating a budget helps you plan for the future.
