Step 2 of 12 to Financial Wellness: How to Build a Budget
Last month, we emphasized the importance of tracking your spending as the first step toward financial wellness. This month, we’re diving into how to build a budget that will help you accurately monitor where your money goes, getting you one step closer to achieving your financial goals! Determine Your Income The first step in creating your budget is to establish your monthly income. Pull out your pay stubs to calculate your earnings after taxes, and don’t forget to include any additional income sources. This total will form the foundation of your budget. Calculate your Monthly Expenses Next, take a close look at your spending. Review your bank statements from the last 3-6 months and categorize your expenses into necessities and discretionary spending. Essentials might include rent or mortgage, groceries, utilities, and insurance, while discretionary spending could cover takeout meals, vacations, and shopping. This analysis will help you see what’s left over each month....