Budgeting 101 - Best Tips For Budgeting

This method will allow you to save an additional $200 to $2000 per month. if you could use an extra $2000 per month then let’s get right into the video.

First, let's talk about why you need a budget!

• Works for any income. The budgeting techniques I'll teach you are applicable to any budget! Whether you make $1,000 per month or $100,000 per month. Everyone, regardless of their income, needs to budget.

• A higher standard of living. When you budget, you will have a higher quality of life. You will be able to budget for both serious and fun expenses without feeling stressed or guilty.

• Achieving your goals. You will be able to achieve your goals much more quickly and consistently. If you want to go on that special vacation or save up for a new house or car, you'll need to learn to budget.

• Financial independence. You will quickly reach a point in your life where you can be completely self-sufficient and have financial freedom. If you learn the free tips I'm giving away in this video, you'll be able to retire happily and much sooner than those who didn't budget.

• Spend with caution. You will not spend money you do not have.

• Emergency funds. You will be prepared if an emergency arises and you require money quickly. There are many different kinds of emergencies that can occur, but it is critical that you can get yourself out of a difficult and unfortunate situation. For example, if you lose your job, you'll have at least three months' worth of emergency funds.

• This is most likely the best reason. You'll be able to sleep better as a result! No more sleepless nights worrying about your financial situation.

• The final reason I'll mention is that it puts you in control of your life and your money!

Now that you have several reasons to persevere and learn how to budget properly, let's get started on your personal budget!

When it comes to budgeting 101, you've probably heard of the 50/20/30 rule. If you haven't already, all you have to do is take your after-tax income and divide it by the following ratio:

You will spend 50% of your income on necessities. For example, rent, groceries, car payments, insurance, health care, minimum debt payment, utilities, and anything else you need to survive and do your job. Depending on your lifestyle, everyone's list will look a little different.

Savings will account for 20% of the budget. As a result, these funds will be invested and used for emergency funds in a savings account, an IRA, and retirement funds. Make sure you have at least three months' worth of emergency funds to cover your basic needs.

30 percent will be spent on desires. These are enjoyable activities such as self-care, vacations, movies, eating out, going to the gym, and other activities that contribute to your lifestyle but are not essential needs.

Even that long-desired new handbag may be covered by these funds. However, you can narrow these down even further by, for example, instead of going to the gym, you can work out at home, or instead of eating out, you can make dinner at home.

To begin creating your own budget, download three months' worth of bank statements to see exactly what you spend your money on so that it can be tailored to your lifestyle and income. After you've completed this, calculate your income after taxes.

Set up three columns, one with 50 percent for needs, another with 20 percent for savings, and a third with 30 percent for wants. Under each of these three columns, a total will be based on your income. So, if your monthly income is $10,000, multiply it by 0.5 (50 percent) to get a total of $5,000 for column number one. Repeat for the remaining three columns. So column two will be 10 000 times 0.2 (20%), which equals $2000 in savings. Column 3 will be your income multiplied by 0.3 (30%), giving you $3000 to spend on whatever you want. Just remember to exchange that 10 000 for your income amount. You now have all of your totals. We're going to work backward to make sure you stay in your budget.

The next step is to fill in each column with the items you spend your money on. This is where the bank statements come in handy. So, for example, if you go through your bank statement, you'll see that you pay rent and how much you pay, so enter that into the needs column. Then you'll notice your daily trip to get your morning coffee, so put that in your wants column. Yes, you can live without coffee, so it does not fall under the category of a need. You'll probably notice that most of the items fall into the needs and wants category at first, especially if you haven't already started saving your money and are barely scraping by each month.

Let's take a look now that you've completed all of your columns. You should have filled Fill out all of the columns with what you spend money on and how much you pay for each item. I'd like you to add up your current totals for each column. You'll now notice one of two things. 1 You'll either see your total be less than the allocated totals that we did at the start with the percentages, or you'll see your total be higher than the allocated total, which should be your goal.

Don't worry, if your total exceeds the goal total, all you'll have to do is make sacrifices, such as working out at home or going for a run around the block instead of paying for a gym membership or looking for cheaper alternatives. You will now repeat this process until your totals match the allocated total that you calculated, in the beginning, using the 50/20/30 rule.

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Take a look at the 20% savings column now. This money should be divided into three categories: emergency funds, retirement funds, and investments. Capitalist Exploits is a good place to start if you're new to investing. Capitalist Exploits is an investment newsletter that focuses on uncovering underutilized investment opportunities with the potential for massive returns. Trustpilot has given it a rating of 4.8 stars. If you want to grow your savings the right way and save the right way, I'll leave a link to them in the description.

A good rule of thumb is to make sure that every dollar has a purpose. This will prevent you from overspending. If you find that you have a few dollars less than your allocated total for needs or wants, feel free to put the extra money towards a specific purpose, such as saving up for that trip to Greece or investing that money.

Another tip is to complete your budget before the start of the month so that you can check and track your progress toward sticking to your budget. Also, keep in mind that each month is usually a little different.

The most important thing is to have a clear goal in mind for why you're on this budget. This will encourage you to stick to your budget.

If you took action today to set up your budget, leave a comment below saying "financial freedom"!