Today I will focus on helping you build a budget. The way to wealth is a two-way street. You can make a lot of money, but if you spend a lot of money you may never build wealth. Look at your income as your offense, and your budget as your defense.
When I graduated college I had a solid job, but I had over $30,000 USD in student loans to pay back. It took me about 6 months before I finally realized I needed to focus on paying down this debt hard-core in order to achieve my financial freedom.
Whether you have student loans or not, creating and KEEPING UP WITH a budget is a great way to monitor your finances. Today’s post comes complete with an Excel spreadsheet to help one get started in building a budget. The following steps will help you use the spreadsheet provided to create your own personal budget!
1) Open a spreadsheet and enter your income you expect to receive for a given month (this should be fairly easy if you have a salaried position)
2) On the left-hand side of the sheet enter any and all expenses you might have for a given month. For Example, if you don’t own a car and use public transportation you can eliminate the “Car Insurance” category or replace it with a monthly expense you do experience, such as “Entertainment”.
3) There is a formula already entered that totals the amounts in each of the categories at the bottom of the month. You want this to be a positive number. A positive number indicates you are making more than you are spending.
One final note, whether it’s a Roth IRA, savings account, or traditional brokerage account, I highly advise setting aside money every month for retirement or a major expense you might be saving up for (Home purchase). Getting on the right financial track starts with a sound budget, so don’t delay, begin today!