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Budgets are a tricky subject for a lot of us. On the one hand, they can be difficult to follow, especially if you set a budget that’s too strict. But on the other hand, they really are the only practical way to get control over your spending to make sure you’re using your money the way you want to.
These three key steps will go a long way in helping you develop a practical, workable budget:
While you’re thinking about your goals, you should also factor in unexpected expenses that could come up. Create an emergency fund for things like a major medical issue or unexpected car problems.
It’s a good idea to monitor your budget on a monthly basis. If you have a spouse or significant other, work on this step together. Are you on track with the financial goals you’ve established? Do you need to make more cuts? Were things purchased that were not budgeted for?
Sitting down to discuss your spending habits and goals is the best way to keep your budget top-of-mind. You may find that your budget can use some adjustment — it may be too stringent in one area and not strict enough in another. It’s helpful to talk about modifying the budget where needed and committing to making it work.
Taking control of your finances to create a budget may seem a little intimidating at first, but by taking things one step at a time, you’ll start to eliminate financial worries and have more enjoyment in your life.