Your income is made up of your salary, bonus, side hustles, stock dividends etc. When it comes to budgeting, the main thing to understand is that there are only two inputs to the equation: your income versus your expenses. If I know I have to make a large expense of say many thousands of dollars, this means I might lower my spending in the next month to compensate. It’s only when I need to spend a lot of money on a big purchase where I need to be cognizant of where I am with my finances.
Therefore, tracking expenses down to the very dollar is not so useful because I have enough money to cover my day to day expenses. However, due to the size of my portfolio, market moves means my portfolio can move in a day what I spend in a month. In addition, my monthly expenditures is something like a few thousand dollars a month. You can’t get to this stage without having a good grasp of your finances. In addition, I’ve saved and invested so much over the years that I’ve already achieved financial independence. However, I don’t find it particularly useful because I am already very observant of my spending habits, and my spending changes month to month depending on what big things I may purchase. Monthly budgets are a good way to make sure you know exactly how much money you’ve made and how much you’ve spent. If you don’t have the wherewithal to know exactly how your money is being spent and why you can’t save money, then this spreadsheet is for you. Read Also On Johnny Africa: The Ultimate Options Wheel Strategy Guide: Passive Income GeneratorĪ lot of people spend so much of their lives living paycheck to paycheck even with a high salary because they just don’t have a good grasp of what their money is being spent on. This means you need to keep track of how much money comes in via salary, side hustles, stock dividends etc, vs how much money you spend. Tracking your budget is particularly useful if you are starting out your financial journey. When is a monthly budget tracking useful? This is because services like will track all of your expenditures that you make with a credit card or debit card but there are other expenses that it doesn’t pick up on like the ones you make with cash. There are so many apps to track budgeting but I always found that a spreadsheet is the way to go. The one and only secret to maintaining a budget is to be consistent. This means always following your plan and sticking to it. This means really looking after how much money comes in and how much money goes out. Over the years, I’ve managed to get a grip on my finances by following a close budgeting schedule. Between racking up credit card debt, student loans, high cost of living in New York, and just a general sense of YOLOing (before it was a thing, I was in a terrible financial state. When I first started working coming out of university, I was all over the place with my finances. Having a firm grasp on your budget is the first step to financial success and freedom.
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