Note: We receive a commission for purchases made through the links on this site. Our sponsors, however, do not influence our editorial content in any way.
The cornerstone of getting your weekly, monthly, and yearly financing in order is budgeting. Many individuals and families have very good intentions of making a budget and sticking to it. Can we talk about your last New Year’s resolution? Inevitably most of us wind up falling back into poor financial habits after a while. This is usually because the budget either isn’t realistic, or its just over-complicated.
Thankfully, there are several ways to simplify a budget so that weekly finances can be figured out with minimal time and effort. A simplified budget is easier to stick to. By detailing exactly what a your expenses are you can easily figure out how much is left over for saving and extracurricular spending.
For starters, make sure the budget is realistic, all expenses must be listed and accurate as possible. Fixed costs such as mortgage payments, insurance, car payments, and other monthly bills are fairly easy to list. Others, such as utility bills and groceries, must be estimated.
Add up all the expenses, being sure not to leave out anything: newspaper subscriptions, morning coffees, movie apps such as Netflix. These seemingly little items add up and must be counted. Subtract expenses from income, and the remaining balance is what there is left to work with.
If all of your expenses total 60% of total income or less, then you are in pretty good shape. Greater than 60%, you will most likely have to cut expenses. This 60% allows you to add your remaining 40% to a combination of a emergency fund, retirement, and investing, then all the fun extras.
To make budgeting even simpler, try doing some of the following:
Spend time once a week going over your budget. Twenty minutes is enough to see if you spent more than usual on groceries or utilities this month, and you can make adjustments accordingly.