By Rick Orford
Are you wondering how to make a budget? If you’re like most, you might realize that while you need to do it, but perhaps you don’t know where to start. Indeed, as Hirsch Serman from Lifecycle Financial LLC. states, “it’s unfortunate that in our society we teach our children to iron a shirt, cook, and change a tire, however, we do not seem to teach them how to manage their finances.”
In general, many people whose financial life is out of control, have other aspects of their lives that are out of control, says Jay Zagorsky, Senior Lecturer at Boston University Questrom School of Business. Zagorsky once published research that showed people who lost a lot of weight saw their wealth climb. When asked about this startling finding, my response is that dieting doesn’t make you richer. Instead, people who can shed a lot of weight typically got their life together in a variety of ways, which, as a by-product, led to better finances.
Budgeting is one of the most important aspects of a healthy financial house. In this article, we asked the experts to find out precisely the very best ways to create, be successful at starting a budget. Let’s dig in!
Start to Make Budget Now, or Don’t Start At All
Brittan Leiser from Financially Savvi Her tells me, “If you have time for an hour of Netflix each month, you have time to create and manage your budget. Budgeting can give you so much peace of mind, so it is worth taking the time to stick with it!”
Furthermore, Leah Bourne from The Money Manual agrees, “The first thing would be to sit down and do one, to begin with. This is not something to put off, and actually putting together a budget can make all of the difference when it comes to managing your finances well.”
Having a budgeting plan allows you to be 100 percent in control of your money, says Karra L. Kingston, Esq. A budgeting plan will help you organize your finances and track all of your financial goals. Having a budget ensures that you always have money put aside for the things that you need and are most important to you. A budget allows you to avoid getting into debt so that you don’t have to file for bankruptcy in the future. If you are already in debt a budgeting plan can help you get out of debt so that you can be financially independent.
Track Your Income & Expenses
Tracking income and expenses is essential to being successful with your budget. It doesn’t matter if you’re using a pen and paper, an app, or a spreadsheet. Indeed, Rebecca Lake, from Boss Single Mama adds, “Before you can really dig into budgeting you need to know what you’re actually doing with your money. That means keeping track of how much money you have coming in and where those dollars are going. You can’t really budget effectively if you’re clueless about what you’re spending all your money on. It doesn’t matter if you using a spending tracker app or a spreadsheet or a notebook to keep track of it but make it a point to know where your money is going.”
Once you know what you’re spending your money on, the next step is to look for opportunities to reduce what you are spending on each item in your budget, says Nick Drewe, WeThrift.com. Every little bit extra helps with increasing your savings or paying off any debt, and to begin with you are going to be able to reduce your expenses by cutting any fat faster than you are going to be able to increase your income.
Further, Brittany and Kelan Kline from The Savvy Couple didn’t have the model of what a successful budget looks like and how it functions. Over time they had to grow and learn all about personal finance and it would have been beneficial to do that before starting college. With how much technology is at our fingertips, there is no reason not to be financially literate in 2020.
Apps and Spreadsheets: Some ways to track expenses
Personally, my favorite way to start and continue updating my budget is to use a Google Sheets spreadsheet. However, that may not be everyone’s cup of tea. Jordan Verroi from CapGenius seems to agree and says he built out an Excel spreadsheet that helped him immensely. Verroi goes on to say that he finds it very helpful to be able to see each year broken down by month and then by category.
Brian Martucci from Money Crashers suggests “use an app like Mint or one of its reputable alternatives. It’s much, much easier to keep track of your finances in a user-friendly mobile app than a multi-sheet Excel file (unless you’re into that).”
However, Chris Brenchley from Surehand warns “It might be hard at first accounting for every single thing, but once you get a hang of it, it works wonders. You soon begin to realize where all your hard-earned money goes towards and maybe you can then identify the unnecessary spending that causes your wealth to diminish.”
Trendy tech and budgeting apps aside, Stefan Smulders, CEO of Expandi.io says “if you really want to start a budget you need to go back to budgeting fundamentals, learning to separate your core wants and needs in order to really save money.”
When looking for a budgeting app, Shaquana Watson-Harkness from Dollars Makes Cents offers “Some of the key features that are very useful when you first start budgeting is linking the financial app to your financial banking accounts and giving you recommendation on how to reduce your spending in certain expense categories.“
Start with your last 3 months of income & expenses
One of my favorite ways to figure out your expenses is to start by reviewing your last 3 calendar months of expenses. Aviva Pinto, the Managing Director of Wealthspire Advisors suggests “credit card statements are great as they break everything out into categories and total what you spend in a year. And, don’t forget to look at your bank account to see how much cash you are withdrawing from the ATM!!
Indeed, William Schumacher of Uprising Food also urges “Know your income. It is easy to make a budget for the money you get while you are on a salary. If you don’t have a fixed income but a varied income, set yourself a salary. You can use your worst day as guidance so that you can use the extra cash as a cushion on your good days.“
What To Include In Your Budget
Build generous savings into your budget—as a priority, not a secondary goal, says Daniel Caughill, The Dog Tail. Setting any budget at all already puts you ahead of most people, but if you leave no room for savings, then you’ll never make any financial progress in your life. Also, unexpected expenses will arise. If you have no emergency savings or cushion built into your budget, it will break as soon as your car breaks down or you take a trip to the emergency room, and then you’ll be in debt just like everyone who doesn’t budget.
Gladice Gong from Earn More Live Freely suggests going through all your expenses one by one. Then, group them into four major categories:
- Essential fixed expenses (money spent on your NEEDS)
- Essential variable expenses (money spent on your NEEDS)
- Non-essential expenses (money spent on your WANT)
- Unexpected expenses (Your emergency fund)
And when it comes to setting up an emergency fund, Daniel Snow of The Snow Agency agrees. “Start an emergency fund. The last thing you think of when you’re young is saving for an emergency. But what this pandemic has taught us is that an emergency is more than necessary. If you focus on starting an emergency fund soon, you’ll have retirement money for a holiday fund. And even a down payment for a house.“, Snow said.
Certainly, this is precisely how I have my own budget set up!
Include Impulse Spending Money
One of the reasons for creating your budget in the first place might be to curb impulse purchases. If you want to stick to it long-term, it may be worth actually incorporating this sort of spending into it. Holly Andrews from KIS Finance adds “I’ve found that suddenly depriving yourself of all spending is really hard to stick to unless you’re capable of being really strict with yourself. So if you know you’re going to struggle, budget in a small amount of money every month which you can use for frivolous spendings like a spontaneous night out or a new jumper.”
Doing this will make your budget much easier to stick to. This way, you won’t have to feel guilty for buying yourself a treat every now and again. And if you don’t spend this allowance, then it can be added to your savings at the month’s end.
Budget Paying Off Debts
If you find yourself like many, you’ll likely save some pesky debt that needs attention. Allen Hudson from North Dallas Bank & Trust Co. recommends planning ahead and “paying off debts and miscellaneous expenses that’ll occur during the month.”
Plan for Surprises
You might think that a leaky roof, of a failed hot water tank, was a surprise. But, was it really? Pretty much everything (except, perhaps granite and diamonds) have a finite consumable lifespan. For example, you might expect a roof to last 20 years, and a car, 10-15 years. As a result, consider setting a little every month for the roof to be rebuilt after it’s useful life.
For example, James Pollard from The Advisor Coach says “Let’s say your home has a brand-new roof which should last 20 years (240 months). Let’s also assume replacing that roof will cost you $12,000. This means you should be budgeting $50 per month for your new roof. I suggest doing this for all major appliances, cars, furniture, etc. “
To be sure, when learning how to make a budget, you’ll want to be realistic. Conversely, no one starts a diet wanting to fail. The same goes for budgeting. Sticking to a realistic budget will significantly improve your chances of success! Lorne Jenkins of Mini Money Management adds “Too often people will set a lofty budget, not be able to stick to it. Then, they completely drop the whole thing. It’s good to have goals, but also know that things happen. And, if you go over or under budget one month it’s not the end of the world. Habits are very difficult to form, so cut yourself some slack to make sure you stay on track.”
When creating a budget it can be so easy to confidently say “I will only spend this much, I will save this much every single month”, says Julie Ramhold from DealNews. But, if your goals aren’t realistic, then your budget won’t be, either. Take the time to note your actual income. Also, note all the bills you have to pay, other expenses you have such as groceries. And, once all those have been deducted, see what you’re left with. From there you can decide how much you’ll put away each month and what you’ll have leftover for “fun money”.
Now, if you’re just starting out, you might find that your expenses are (hopefully not) higher than your income. If, by chance, you need a little extra push, Brandon Walch from Shark Eyes suggests being a creating by replacing certain expenses with cheaper versions. For example, “canceling a gym membership and download a video or mobile application for workouts instead.” Adeel Shabir from Infinite Recovery adds “the expenses you spend on food and daily coffee can be controlled by making your own food and coffee.“
Who doesn’t want to be successful? To be sure, no one wants to fail. And if you’re just starting to make a budget, I think it’s better to set yourself up for success, then tweak later.
James Jason of Mitrade seems to concur: “When I was young and getting started in budgeting, I thought saving would enable me to get anything that I wanted. At age 15, I decided to save so as to purchase a mountain bike worth $1,000. After months of saving loose change in my piggy bank, I ended up with barely $100. This discouraged me and I ended up consuming the savings out of frustration.”
Fast forward to your mid-late 30’s, perhaps the goal is a new car rather than a mountain bike. Regardless of the goal, it’s better to save monthly. Then, pay it off in one shot, rather than to use credit. Colleen Mitchell from Inspired Forward adds: “Save up for big expenses over time. Setting aside a little each month for an expense that only happens once a year means it won’t surprise her when it comes due. Doing this will also give her a better picture of her true monthly expenses.”
What I’d Tell My Younger Self About Making a Budget
Starting a budget early can certainly supercharge ones financial wellbeing.
Meg Marrs of Safer Senior Care seems to agree. “My advice to my younger self would be to live below my means wherever possible. And, stick to a budget that includes savings and investment based on long term goals.“, Marrs says. Indeed, making a budget, and sticking to it is a skill. Also, Robert Farrington from The College Investor agrees “Budgeting is a skill and it takes time to learn. You’ll have ups and downs but it’s a skill with benefits that can last a lifetime financially, mentally, and emotionally.”
And David Weingot from DMAC Security says “If you already have a budget in place, try to stick with it. You might think buying that stick of gum won’t account for something, but it will. Be wise about money, because this is something you’ll bring throughout your adult life. “
Keep at Least Two Separate Bank Accounts
I remember starting my first budget at around 2010-2011. I recall failing month after month, by spending too much on stuff I didn’t need. Today, when I look back, I realize how much I wasted. But, then I realized, if I want to be successful at reining in my spending, perhaps one way would be to use two bank accounts? One bank account would be for the needs, and the other for wants. And, once the latter account was depleted, that was it, until I replenished it, on my next paycheck!
Indeed, Malte Scholtz from Airfocus echo’s a similar suggestion “When I was younger, I kept finding different ways of spending money without putting anything on the side. I was aware of the importance of savings but didn’t pay much attention to it. As a result, my savings account was almost empty and I kept using that money to buy things I urgently needed (or at least thought I did). The breaking point was my decision to start a business. I was incredibly passionate yet I had no funds for investing so I had to delay the process for a while and missed several amazing opportunities.“
Beth McCallum from Oh So Spotless suggests creating two bank accounts. It’s super easy to set up a new account, so don’t let this put you off. One bank account would be for general payments such as bills, gas, groceries, and toiletries. You know, the boring stuff.
The other bank account would be for spending. Put a percentage of your earnings in that account every month and enjoy guilt-free and controlled spending! Having a certain budget for spending and for bills can make it easier to save money, too. Whatever’s left can go straight to the savings account.
Furthermore, Sandy Yong from The Money Master supercharges this idea by creating savings accounts for each of her goals. Indeed, this is exactly how I budget my large purchases! Yong says, “Create Multiple Savings Accounts so that I can keep track of my individual savings goals. When you go into your online banking account, you can also create a “nickname” for your account. For example, you can label it ‘Vacation Fund $2K’ or ‘New Laptop $900’. That way I would not feel tempted to spend my money. That way, I could see clearly how much I have saved up and how much more I need to reach my goal.”
Pay Yourself First
The second thing I’d tell my younger self, says Tawnya Redding from Money Saved is Money Earned, is to always pay yourself first, no matter what type of budget you have. Initially, I budgeted like most do where I’d put in all my expenses. And, whatever was leftover went to fun things or savings. Now, I have all my retirement/savings contributions automatically deducted or I deduct them first when my paycheck hits. It’s important to prioritize savings. That way, you’ll adjust to what money you have leftover rather than having nothing for savings.
A Budget isn’t only for when Money is Tight
Making a budget isn’t just for when money is tight. A budget is a financial picture that helps see how the money flows. Rebecca Hunter from The Loaded Pig agrees. “The first step in budgeting is to think of my financial goals. Then, consider my priorities and only then to evaluate my spending habits. This will help guide how I allocate my money and help me achieve my goals. Money isn’t everything. But, it reduces a lot of stress to understand where my money is going and to be able to easily manage it”, Hunter added.
Keeping an Emergency Fund
Let’s face it. Stuff will happen, it always does! So, with that in mind, it’s best to have an emergency fund ready for things that happen which are out of your control. Experts agree that an emergency fund should cover 3-6 months of “Needs” expenses. “Needs” expenses are things like rent/mortgage, minimum payments, utilities, food, etc. And sorry, Netflix is not a need!
Mark Jenner from FoodFireFriends adds “As a young fellow, I didn’t know a thing about budgeting. I’d spend until I had nothing, and this didn’t change until I had an emergency one day and was seriously stuck. It sent me into a full-on panic and a friend had to bail me out.” I guess the question remains, who hasn’t been in a situation like that?
Letters to Your Younger Self
Mark Pakingan from Every Dime Matters even wrote a letter about how to start a budget!
How are you? It’s been a while. I know you’ve been itching to do something great but hear me out.
I urge you to listen and follow these things carefully. Let me assure you, you will do better!
- Start small – You can’t have a dollar without a penny. No matter how small it is, start saving money. Save a portion of your allowance or any spare change you get.. Get a piggy bank and start putting pennies or dollars. Pick up every coin you see on the road – a little goes a long way.
- Be simple – the simpler your life, the less you need to spend on things. You don’t need to impress others. It’s easy to brag your new iPhone and get noticed. But wait a couple of years and you’re not the talk of the town anymore.
- Set a clear goal – Why do you save money? Do you want to buy a house? Get $100,000 on a bank? Think of your purpose, and stick to it. If you’re tempted to buy something, remind yourself of that goal.
- Get an accountability partner – Well, they say two heads are better than one. Ask for help. Your partner can help you get motivated to budget and control your spending habits.
- Invest early – Time is an important factor in how your money grows. Don’t just let it sit in your bank, make it grow. Invest as soon as you can. If you don’t know what to do, research, or ask a financial advisor.
- Reward yourself – For every big step, you achieved, reward yourself. Have you hit the $10,000 mark? Reward yourself – but not too much. The idea is to make the process enjoyable.
- Gratitude – Be thankful. You would always complain about how little you have and forget to be grateful. Learn to appreciate even the little things. When you learn the value of money, your whole perspective will change.
Uphold this advice and you’ll be rolling in no-time. I care for you and I know you will do well.
Pericles Rellas from Abundance & Prosperity shares his letter to his younger self.
RE: An important tip
We don’t often have a chance to speak with our younger self, so when given this amazing opportunity, I jumped. The fact is you have been on my mind lately, so I am glad to have the chance to talk. I know you are dealing with a lot right now and you are both excited and nervous about the future. Well let me start by saying it all works out. I won’t say anymore because I don’t want to spoil the adventure for you.
I know you have completed college and are now working in a career that you love. And, I have something important to tell you that I know will make a huge difference in your life and for your future. Here it is: Create and manage a budget. Now I know that it sucks to read that. I really get it. But it is probably one of the most important things you can do right now. But don’t call it a budget. I hate the name too. Sounds way too constricting – like all the rules around the house when we were kids, lol. Anyway, name it something else. I prefer Prosperity Structure myself as it is inspiring. But pick something that works for you.
Start by writing everything you are spending money on. Think rent, car payment, insurance, utilities, groceries, dining out, credit card debt, cash, etc. All that stuff. Don’t forget to include the expenses that only come in once or twice a year. That way you won’t be caught off guard when they show up in the mail. You should also include money for your retirement. Think travel – since I know you love that, and something for other expenses that may come up during the year.
Then, write your monthly take-home pay at the top of the page. Then, start subtracting all those expenses from that number. I know you don’t want to, but trust me, you will be glad you did this now rather than later. Make sure you subtract everything and then see what is left. This is where it gets fun. Take 50% of that number and put it towards retirement, 40% towards travel, and 10% towards misc expenses.
What you just created is so much more than a budget. You created a structure to manage and grow your prosperity. Seriously! If you just pay everything on that sheet each month, and not spend more than you set for each item, you will be getting richer every day, month and year. Like no kidding. Your debt will go down and what you are saving will go up. And if you invest the retirement money wisely you will be growing it even faster.
When there is enough money in your travel account, go on a trip. Pay for it on a points credit card. Then, pay the credit card in full from that travel account when you get home. The points are an added bonus. And you don’t have to worry about how you are going to pay for the trip because it’s already paid for. Boom! You’re welcome.
I really love you and wanted to give this to you while you are still young and can get the maximum benefit in your life. You are going to have an amazing journey, so enjoy.
PS In 2019, you may want to invest in a company that makes surgical masks. Just a thought.
What to Tell Your Children about Budgeting
I don’t know about you, but, I wish someone spoke to me about budgeting when I was younger. To be sure, while I’m not sure I would have listened at the time, the words would have remained with me. Michael Lewis from Tutor Financial Advisors explained budgeting to his children, and this is what he said:
Before you sit down and create a budget, you need to understand that a budget is part of a bigger process known as financial planning. A financial plan requires goals, desires, and dreams. These dreams are what powers your plan and will ultimately dictate how you deploy your financial resources. A budget reflects the choices you make, allocating resources between short-term needs, and long-term goals.
You cannot create a meaningful budget without knowing your numbers. How can you allocate monies towards rent, utilities, food if you don’t know how much things cost?
And lastly, it is vitally important to know how to live within a budget. Therefore once you create a budget monitor your expenses and evaluate how well you are doing.
How to Make Sure your Budget is A Success
Lewis Keegan of SkillScouter says “In starting a budget, make sure to lay down first the things you spend your money on – fare, food allowance, utility expense (water, electricity), rent, your child’s education, your family’s health care, subscriptions, etc. This is so you can see whether your money is being allocated intelligently or if you are simply burning money on unimportant things.“
Thomas Henske from Lenox Advisors adds “Most everything about starting budgeting habits early helps the world conspire in your favor. Those budgeting skills include making saving a priority. Without making budgeting a habit one’s financial well-being doesn’t stand a chance.”
Use Direct Deposit
Automate those bill payments! Doing so will let you spend time doing more productive things. Also, it ensures that you won’t miss a payment, and perhaps damaging your credit rating.
Just Because You Have It, Doesn’t Mean You Have to Spend it
If you’re in you’re mid-late 30’s, perhaps you find yourself making more money than you did when you were in your early 20’s. However, now, perhaps you have a nicer home, car, boat, or what have you.
Less is more. When I go out shopping, I almost always ask myself if I really want the item, 1 hour later. This ensures that I’m not wasting money on something I won’t need. For example, in my 20’s, I’d often find myself buying clothes and shoes at the mall, only to leave them hung up in the closet with the tags.
Ryan Roller of Bead the Change agrees “Just because you have it, doesn’t mean you have to spend it. At one time having money; any money, translated solely to what I could buy with it. Saving it never occurred to me, and using it as a tool was an alien concept. In the time since I have learned to appreciate saving money, and using money as a tool to build on and to make grow.”
Budget by Pay Day, not by Month
If you find that money is rushing out the door faster at the beginning of the month, consider budgeting based on your paydays rather than by month. For example, if you get paid on the 1st and 15th of the month, then divide all your expenses into two. Then set those funds aside. Jonathan Hess from Hess Financial Coaching agrees. “Many people are paid multiple times per month. It only makes sense to budget out your expenses per paycheck to make sure that you will have enough to cover everything. It does no good to create a monthly budget where 90% of your expenses are due in the first half of the month while your paychecks come midway and at the end of the month”, Hess said.
Just Stay Home
Hindsight is certainly 2020. And given that 2020 is the pandemic year, staying home can certainly help the budget. For example, Eliza Nimmich from Tutor The People adds “Cooking your own food, avoid unnecessary spending and many more, could let you save…” Indeed, during the lockdown period, I saved more than 3x what I normally would have during the same period!
And, I certainly agree, if people can learn meal planning and cook at home, they can save so much more than going to restaurants. It’s also great for the waistline! Eliza Cross from The YOLO Blog adds “In 2019, the USDA says Americans spent an average of 9.5% of their disposable income on food, with takeout, fast food, delivery, and restaurant meals accounting for more than 54.8 percent of total food expenditures.
Live Frugally and Shop Savvy
Andrea Woroch agrees frugal doesn’t mean cheap and offers the following advice:
Living frugally means you spend on what matters most while saving on things that don’t. This means, always looking for used options before buying anything brand new, comparing prices, and using coupons. The good news is, it’s so easy to save these days.
For instance, sites like CouponFollow.com offer thousands of online coupons to popular retailers to help you stretch your budget. Also, you can even download their Cently browser tool that automatically applies coupons at check out so you don’t have to do any extra work searching online for one. And, check out Fetch Rewards, this free cashback app rewards you with free gift cards to Walmart, Amazon, and other retailers by simply uploading a picture of your receipt.
Use these free gift cards to offset ongoing expenses and put the money you save toward your bills or savings goals, Woroch says.
Double Check and Reconcile the Numbers
Reconcile your budget using Mint or your bank account. Do this weekly it’s better than doing it at the end of the month when you already overspent. This way you can track the categories that you are spending on and not over. Ensure you reconcile your budget for the month with your spouse so that you are both in sync with each other.
It’s More Stressful NOT to Budget
Lindsey Danis adds “I’d also let my younger self in on a secret–it’s way more stressful not to budget (worry about your money, pay bills late b/c you’re not keeping track, be in a constant debt cycle, and not even really value your time or your money because you don’t have a handle on what’s going in and out) than it is to budget. Even when the numbers are scary (more going out than coming in), you’ve gotta look. Then you can make a plan to deal with it.”
Be Frugal, Thrifty and Minimal
Be frugal, thrifty, and minimal. Jay Scott from Pugsquest says “When you are young, you do not have to have the whole world under your feet. That means you should not worry about living a big and expensive life just to fit in. Most of the things we hold dear are materialistic, which means they are replaceable. With that in mind, avoid spending too much on items that you may not need in a year.”
Indeed making the right spending choices can make all the difference. For example, Tim Sheehan from Greenlight adds “I’d also underscore just how important it is to learn how to make trade-off decisions with your money. Believe it or not, kids can develop emotional reactions to spending and saving by the age of five. Had I known this in kindergarten, I would have thought more about wants vs. needs and paid more attention to making smart decisions with my allowance.”
Don’t Stop When you Get Ahead
If you’ve made it this far, one thing you might need to watch out for is what happens when you get ahead. By that, I mean, once everything is working and the wheels are in motion, you might start to get a little lazy. Indeed, getting lazy might feel warranted, but, it can backfire.
One way to combat this is to keep tracking income and expenses daily. Allison Baggerly from Inspired Budget agrees and adds “You’ll learn so much about yourself and your finances when you truly know your spending habits. You’ll learn where you tend to overspend. Once you know this, you can set up boundaries and expectations to help you reach your financial goals.”
Ask The Experts
Tom Winter of DevSkiller “I used to think that I can create a financial plan all by myself, without consulting any experts or researching different budgeting strategies. I decided on the majority of things instinctively and didn’t have a long-term plan.. This oversight cost me a lot in the following months since my finances became incredibly unstable. Once I hired a professional to help me with my budget, I realized how many factors I didn’t take into account due to the lack of knowledge. This is one thing I would change instantly because I lost a lot of time and money on experimenting with my budget instead of crafting a detailed plan in the first place.”
Credit Unions and other Financial Institutions
Credit unions can be an incredible resource for those looking to make a budget, and adhering to it. For example, credit unions often have financial planners, advisors, and lenders who understand your very needs. Moreover, these very same lenders can sometimes even help lower your borrowing costs once they know your full financial picture.
Frequently Asked Questions
How Can I Learn More about how to Make a Budget?
Read books, blogs, and get someone who you trust to talk to you about investing before you’re ready to invest. – Holly Wolf, Berkshire Advisors
What if I need more help when creating a budget?
Don’t be afraid to ask for help! There are lots of different professionals out there who can help with any need you have. Teachers, counselors, accountants, attorneys, etc. Don’t be afraid to ask for help when you need it and if you can’t afford to pay, ask anyway. Some of these professionals offer pro bono work or can direct you to free or low-cost alternatives. – Julianne Miller, AFC® Life Money Management LLC
How do I handle debt within a budget?
Like any other bill, budget the gradual paydown of the debt. Judson Hill from Bespoke Financial agrees “Pay off your debt. Although saving money is a good way of planning for your future, you should still think about repaying your debt. You should be aggressive in paying off your debt and be careful not to let your credit cards get out of hand.“
How much is a good amount to start saving?
If you don’t already have a set monthly amount to save, then start small. Even if it’s just $40-$50 a month to start, anything is better than nothing.
Michael Nemeroff from RushOrderTees agrees. “Start saving money right then and there, even if it was only 5 or 10 dollars at a time, importantly, to not touch it with very good reason. When people are young, the idea of their late 30s, late 40s, and the entirety of their 50s feels like it will happen to someone else, and in a way, they are right; the person they become will be formed by the person they are then.”, Nemeroff says.
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