What's the Best Way to Begin Budgeting?

Budgeting Made Easy

Hey Kristin, I'm a young professional who is looking to learn how to manage my money better so I can save for the future. Is there a simple and fun way to track my spending each month? Best, April

Hey April, Congratulations on taking the first step towards financial independence! Creating a budget is essential to help you save for emergencies, invest, and treat yourself to things you enjoy. Fortunately, technology has made it easier than ever to plan and track your spending without the need for a pencil, paper, and calculator. After exploring various budgeting apps, Mint stands out as our top recommendation. However, feel free to explore other options to find one that suits your needs best.

Remember, merely tracking your income and expenses isn't the same as having a budget. A budget takes it a step further by outlining how you should allocate your money each month. These apps not only help you track your spending but also assist you in determining how much you should spend or save after factoring in your bills.

Setting financial goals is a great way to kickstart your budgeting journey. Whether you aspire to buy a house, pay off debt, or save a specific amount each month, write down your goals to create a roadmap for achieving them. By making your money work for you, your dreams can become a reality.

Gather your financial documents and use your chosen app to assess your income and expenses. This will provide a starting point for your budgeting process, including any outstanding debts. Ensure your goals are SMART – Specific, Measurable, Achievable, Relevant, and Time-bound. By following this framework, you can make progress towards your objectives.

If you haven't defined specific goals yet, consider following the 50/30/20 budgeting rule – spending 50% on needs, 30% on wants, and allocating 20% towards savings or debt repayment. This approach will help you build a solid savings foundation even before you set clear goals.

Whether you choose to use an app or prefer the DIY route, creating a budget and sticking to it will help you stay on track with your finances. Just remember to allow yourself some flexibility for leisure activities and personal indulgences. Good luck on your budgeting journey! - Kristin