Budgeting is a healthy aspect of anyone’s financial health. It should be done periodically whether you are struggling financially or easily making ends meet in order to organize your priorities. The broad, and simple answer to budgeting is to identify your necessities, identify your “wants”, and then calculate how much you spend each month on these categories. Here are the steps to help you get started when first learning or attempting to complete a budget.

1.     Print out the last 2-3 months of your bank statements. You may also need to access your Cash App statements, Uber Eats statements, etc.

2.     Have multiple colors of highlighters (4-5) if possible, to help categorize and visualize your spending.

3.     Categories may include but are not limited to:

NEEDS

Bills (Electric, Water, Rent, Car payment, Car Insurance, cell phone, etc.)

Food

Gas/Car Maintenance

Toiletries

Credit Card Payments

WANTS

Shopping

Beauty supplies/Nail salon

Streaming Services/Internet (Netflix, Hulu, Prime)

Eating out/Door Dash/Coffee

Entertainment

1.     Take a highlighter and then highlight all spending of a category in one color. For example, you may choose pink to highlight all of your shopping charges you find on your statements. You may use yellow to highlight all of your bills, and then blue for all of your eating out, etc.

2.     Use the link below (Quicken.com) to open up a monthly budget tool and input your findings OR put on a separate piece of paper the categories where you put the totals for each category.

Budget Tool

3.     Add up all the categories individually. Put totals down for things you NEED in a category and then how much you are spending on WANTS.

4.     Take your INCOME and then subtract from the other two categories to see how much you may have left and where you need to cut things out.

5.     If you are patient, detailed, and honest with your findings, you will have a great idea of what you need to cut out or cut back on in order to live within your means. You can then set goals in order to save for emergencies or fun splurges on yourself and/or family.

6.     Don’t forget the little things such as birthdays, holidays, and other mandatory events that will add to your budget planning.

Why Does this Matter For You and How Can Life4Real Help?

Our goal is to help walk alongside you to create a budget plan that will lead/guide you to reach your goals. A few ways we can support you are:

·      Look at car insurance, medical insurance, entertainment sources, food, education, etc.…

o   Could any of these be changed or downsized to put more room in your budget?

o   Could you contact the company to see if you could do anything to reduce your payments?

·      Help you recognize the areas you can save money in your budget and then make a plan to start saving.

·      Support you with clothing, toiletries, other items needed to save money.

·      Help find resources to support with food, employment, housing.