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4 Steps for Making Your Budget

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Need help getting a better grasp on your finances? Learning about budgeting can be a challenge. Often, we tend not to have a plan for money and hope it ends up working out. Budgeting is the first step towards financial health.  Creating a budget can be simple—the first step figuring out your net income. Often, people misconstrue their net income with their gross income. Make sure you keep this number handy because it is the key to creating a reasonable budget. 

Step number two is a tough one. Where do you spend your money? Commonly, only significant, more substantial spending is factored into budgets, making most budgets off the mark. Little expenses may seem insignificant at the time, but after a month, it often adds up to an alarming number. Make sure to factor in these small expenses, including them, will keep you on the path to success.

Your expenditures can overshadow step three.  Setting goals are critical in budgeting. Whether you are saving for a wedding, reducing credit card debt, or making extra payments on a mortgage, looking forward to an end goal can offer a light at the end of the tunnel in this process.

Step four is the key to maintaining your budget and the goals you set out to reach. You must be willing to adjust your budget and be flexible. Are you spending too much per month at your favorite restaurant? Cutting it out cold turkey can be tough, it may be easier to scale back how often you eat out. 

What is real about little expenses adding up, is also true about small savings. Adding small amounts to your savings over time does add up.  With every great experiment, you must be willing to persevere and create change. With that change, you must keep checking in with yourself and your budget to see if it's on the mark. If it needs some work, change it and stick to it.

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