How to budget

When it comes down to it, budgeting is sorting out a tier system for your finances with essentials at the top, savings in the middle, and non-essentials such as your 9th pair of shoes at the bottom. Budgeting is having money available for the things you have to do and the things you want to do. Food, your kids’ education and rent are unavoidable expenses but, on the other hand, if money is tight that romantic getaway to the Cotswolds can probably wait. 

Start working out a budget by tallying your income and expenses. Costs like rent and insurance are fixed whereas variable expenses include groceries and gas. Less obvious expenses also include interest owed on debt and savings contributions. Financial experts advise that you also set aside a small monthly amount for an emergency fund. 

The key to budgeting is striking a healthy balance between money coming in and money going out. If you find that you’re not making it on one end, check where you can cut expenses to restore the balance.