As we approach 2021, it’s no secret that budgets are more important than ever before. With the uncertainty of the pandemic, keeping an eye on our finances is crucial. But where should beginners start when it comes to budgeting? The following guide will give you some tips and tricks to make sure your budget is successful in 2021.
1. Identify your expenses
Start by identifying all of your expenses. This includes fixed expenses such as rent and utility bills, as well as variable expenses such as groceries and entertainment. Write them all down and make sure you have an accurate view of where your money is going.
2. Determine your income
Your income should also be identified, including all sources of income such as your salary, freelance work, or side hustles. Be sure to consider any taxes or deductions that may come out of your income.
3. Create a budget plan
Once you have a clear view of your expenses and income, it’s time to create a budget plan. Determine how much money you have coming in each month and how much you need to spend on your regular expenses. From there, you can decide how much you can afford to allocate to discretionary spending, such as eating out or buying clothes.
4. Track your spending
Tracking your spending is essential to keeping your budget on track. Track all of your transactions in a spreadsheet, app, or notebook. This will help you to identify any areas where you’re overspending and make adjustments as necessary.
5. Prioritize saving
One of the most important things you can do when budgeting is to prioritize saving. Set a savings goal for yourself each month and stick to it. It’s recommended that you save at least 20% of your income each month, but any amount you can put aside will help.
6. Be flexible
Your budget plan is not set in stone. Unexpected expenses can come up, and sometimes you may need to adjust your spending priorities. Be flexible and willing to make changes to your budget as needed.
7. Keep it simple
Budgeting doesn’t have to be complicated. Use simple tools to help you keep track of your finances, such as a pen and paper or a budgeting app. The important thing is that you’re keeping track of your expenses and income, and making adjustments accordingly.
In conclusion, a successful budget in 2021 requires some effort and discipline, but it’s achievable with the right mindset and tools. By identifying your expenses, determining your income, creating a budget plan, tracking your spending, prioritizing saving, being flexible, and keeping it simple, you can make sure your financial goals are met and your finances are in order for the year to come.