After we figure out where our money goes, where we are overspending, and how much money is coming in, it is time to adjust our budget accordingly. We have recognized the importance of our finance and now it is time to figure out where our money is needed most.
Finding practical ways to reduce our spending is one of the most important steps in the budgeting process. Having a budget journal will help us be organized and keep track of our income and expenses. We can categorize our expenses and split them between personal and household expenses. Household expenses may include mortgage, utilities, insurance, car payments, groceries, and so on. Personal expenses may include entertainment, dining out, gifts, etc. We can also consider investing a small percentage of our pay cheques in savings for a rainy day or for the future.
Tomorrow we’ll explore a few thrifty saving ideas!