For young adults, budgeting is a way to properly allocate their paychecks towards retirement savings, student loan repayments, emergency savings, rent and utilities etc. Not only making ends meet, but also preparing a secure, stress free system for an easier lifestyle. Budgeting isn’t only for young adults, it’s a way of creating a plan to spend your money. Creating the plan allows you to determine the advance whether you will have enough money to do the things you need or would like to do.
Seven steps to creating a budget plan.
Step one – set goals write down what’s important to you and use your list to determine goals for your money. Ex. If you plan on buying a particular vehicle then your goal is to save up a moderate down payment.Step two – identify income and expenses. Look where your money comes from and where it goes now. Include everything for ex. Self- employment income, child tax benefits, child maintenance and spousal support etc. Then record your spending by receipts, bills or gathering information from your bank account.
Step three – separate needs from wants. If you aren’t sure an item is a need or a want, do without it for a period of time.
Step four - design your budget before going further, make sure your expenses aren’t more than your income.
Step five -Use a pay-cheque plan to match your spending patterns to your income schedule.
Step six- manage your seasonal expenses. Create two separate pages of your monthly expenses and your seasonal expenses. Ex. Car repairs, Clothing, Gifts etc.
Step seven – Looking ahead, ask yourself these questions.
- Did I calculate my income correctly?
- Are my expense figures accurate?
- Is everyone's income and expenses accounted for?
- Is my plan based on actual numbers or what I hope I can earn or spend?
- Did I give it a fair chance?
- Do I need professional advice?
For more information look for - https://www.mymoneycoach.ca/money-management/financial-planning-future
