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How to Make a Budget and Stick to it

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Building a budget is the first step to getting out of debt – and really any money goal.

You can’t plan for tomorrow when you don’t know where you stand today. Debt.com makes budgeting easy with this step-by-step guide. Below we break down how to get started by calculating your income and expenses, setting SMART goals, and getting that plan off the ground…

Calculate your net income

This is pretty basic, net income is all earnings minus taxes or other deductions. Income can be earned or unearned. The IRS divides income into three categories: active, passive, and portfolio. Tax laws for each revenue will vary from state to state, if you work for yourself they’re important to know to correctly calculate your net income.

Earned or Active Income

Money acquired from working a job as an employee, contractor, freelancer, or self-employed is earned income. Make sure you know who is responsible for collecting taxes, you could get caught owing taxes if you haven’t planned ahead. Low- to moderate-income working individuals and couples, particularly those with children may qualify for earned income tax credit. Sources for earned income include:

  • Wages
  • Salaries
  • Tips
  • Bonuses
  • Commissions
  • Disability payments
  • Combat pay

Find out: How to Make Extra Money to Pay Off Debt

Unearned or Passive Income

Money received by owning property including real estate, intellectual ideas, or financial assets is unearned income or passive income. These properties may have been passed onto you through inheritance or earned like a pension. Passive income revenue includes:

  1. Profit Income – If you work for yourself the income from the sale of your product or service.
  2. Social Security and Pension Income – Many companies and government jobs invest in your retirement so you continue to have a steady income.
  3. VA benefits – Men and women who have served in our military
  4. Dividend Income – When you invest in stocks or companies you receive dividends as a shareholder.
  5. Residual Income – This passive income comes from an affiliate or blog site. It’s not really “unearned” because your time and intellect were spent building the site.
  6. Rental Income – With so many rental sites almost anyone can make money by renting out properties.
  7. Capital Gains Income – When you sell an appreciated asset such as real estate, a business, stocks, bonds, or even a vehicle. These are usually a one-and-done, not a steady income source.
  8. Royalty Income – Selling your idea(s) to someone who can make it a reality, you earn a portion of the profits.
  9. Interest Income – If you have lent money to a friend or family member you should make sure to charge interest that is equal to what your money earns in a savings account.
  10. Court settlement payouts – When the court decides you should be compensated because you have been injured. The court may also decide to grant you spousal or child support. These may not be reliable income sources and should be handled accordingly.
  11. Financial Windfalls – Winnings from a competition, playing the lottery, or other gambling games of chance.
  12. Inheritance Income – Any of the above “properties” may be passed onto friends or family upon death. You’ll be subject to some taxes if the inheritance is considered income “in respect of a decedent”, but usually it is not taxable income.

Most people only have two revenue streams, so determining your income should be pretty straightforward. But, if you lose or acquire a new or unique income source you will want to re-evaluate. Most windfalls should be dedicated to getting out of debt or go directly into savings.

Find out: How to Track Down Unclaimed Money

Variable income

If you work for yourself, you probably have a variable or irregular income. Planning is difficult because you don’t know when your next payday is. Understanding your income is crucial in your case.

Here are some numbers to know:

  • Last year’s net income (after taxes and business expenses)
  • Your average monthly income ( net income divided by 12)
  • Your lowest-earning month’s net income

As your income varies from month to month you must make sure you save funds from high-earning months to cover low-earning months. Knowing what your average expenses are first will make it easier to plan by prioritizing necessities and covering shortfalls.

Steps to Help You Budget with Variable Income

Deductions

Who’s FICA? Why is he getting all my money? According to the Federal Insurance Contributions Act (FICA), your employer is responsible for ensuring taxes to fund social security and medicare are withheld by federal law. Besides income and FICA taxes, you can also divert money into personal savings accounts. Other deductions are voluntary and can be taken directly from your paycheck before taxes, lowering your taxable income. Voluntary deductions include:

  • Health and dental insurance
  • Flexible spending plans
  • Commuter plans
  • Life insurance
  • Retirement 401k plans

Some deductions are due to court-ordered payments. The federal garnishment limit is 25 percent of an individual’s disposable income, but this does not take into account the person’s other financial needs. Wage garnishments must be paid as follows:

  • Child Support
  • Federal tax debt
  • Federal student loans
  • State or local tax debt
  • Unpaid court costs
  • Earliest credit card or other debt garnishments
  • Medical bills
  • Any other debts on which a person has defaulted

Understanding Tax Deductions and Credits

Calculate your monthly expenses

OK, now that you know how much money you have coming in, let’s figure out where it’s going. Gather your banking statements and credit card statements from the last 3-4 months, the further back the more accurate your budget is likely to be. You are going to categorize each expense starting with necessities and then down to nonessentials for each month

Fact: Housing, transportation, food, insurance, and healthcare are the 5 largest expenses in the average budget.

Necessities or non-discretionary spending

These categories are your basic needs in life food, water, shelter, clothes, and security. They include:

  • Food includes groceries, but not dining out or other small food purchases
  • Utility bills for water, electricity, internet, cable, and phone services
  • Housing costs include mortgage, rent, insurance, taxes, and HOA fees
  • Transportation costs for car maintenance, gas, insurance, transit fare, and loan payments
  • Insurance for health, dental, life, or flexible spending contributions
  • Student loan payments
  • Tax payment plans for back taxes or tax withholding for self-employment
  • Savings may not seem like a need but making sure you have funds available for an emergency or retirement is extremely important

Even though these are considered necessary expenses, you can trim costs by shopping around for better terms.

Wants or discretionary spending

Discretionary spending is any purchases of non-essential goods or services – anything that’s not listed in the category above. This type of spending may include things like:

  • Dining out
  • Entertainment
  • Travel
  • Grooming/Beauty services

As you categorize your expenses you will start to see trends. Some expenses are the same every month; these are fixed expenses. Other costs will change month to month and are known as variable expenses.

Talk to a debt relief specialist to find the best way to pay off credit card debt.

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Fixed expenses

A fixed expense is the same every month. Most loans like mortgages and car loans are non-discretionary fixed expenses. Rent, insurance, and phone bills are also non-discretionary fixed bills unless the lease or contract is renewed. But you can plan ahead when you know your contract will change and shop for a better deal if the rates go up.

There are also discretionary expenses that are fixed like gym memberships or streaming services. As with other discretionary costs, if you need to trim expenses this is the best place to start. These costs should be the first to go when your budget needs to be adjusted.

Variable expenses

Any cost that changes each month is referred to as a variable expense. Prices for most variable expenses are greatly influenced by national or global economic factors such as interest rates, labor force, inflation, or a recession. Many of these are non-discretionary necessities such as food, utilities, transportation, and clothing.

For example, as gas prices go up the cost of many other goods also rises due to higher shipping costs for businesses. So not only do you pay at the pump but also pay more to buy at retail stores. Understanding how prices may change can help you plan for tough economic times.

Food costs make up about 10% of a monthly budget, they include groceries, dining out, and your daily coffee run. The amount you spend can be more if you dine out every night or less if you cut coupons on every shopping trip and meal plan.

Seasonal Costs

Variable monthly expenses can make planning complicated. But, they may have a seasonal cycle you can track. Your utility costs, for example, may be greater in the winter if you live in the north but, if you live in the south your summer cooling costs will be much larger. Because utilities such as heating and air are necessary, you must make sure you budget for the change in costs.

There are some big bills that you only pay every six months or annually, like insurance, taxes, or car registration. Make sure you plan ahead for these costs by finding a monthly average. It’s less stressful to put $200 aside every month, instead of scrambling for $1,200 to cover car insurance every 6 months. Here’s a list of events to budget for:

  • Education costs for back-to-school supplies, extracurricular activities, and tuition
  • Holidays seem to surprise everyone, plan early
  • Major events such as births, funerals, graduations, job loss, and weddings
  • Vacations and travel can be expensive if you don’t shop around for airfare, lodging, car rentals, and dining
  • Weather changes can affect housing and automobile expenses, weatherproofing can save you in the future

Budgeting for specific events

Set S.M.A.R.T. goals for your money

Before you start budgeting you need to set goals for your money. Make sure the goal is specific, measurable, attainable, relevant/ realistic, and time-bound or S.M.A.R.T. for short. This acronym can help you create goals that will have a better chance of being accomplished. Use these terms to ask yourself some questions while you set your goals.

Understanding the psychology of budgeting and rewards will help keep on track with your goals. Make sure to set short-term as well as long-term financial goals to help you feel accomplished. Waiting 5 years to meet a savings goal can be disheartening. But, the more frequent rewards, if you have small weekly or monthly goals that are met, will keep you motivated.

Knowing your nature while asking yourself questions will narrow your goal. To create S.M.A.R.T. goals, let’s start with a basic, non-SMART goal and go through each term and its qualifiers.

As our example let’s use the goal — “ I want to get out of debt.”

Specific

Set a well-defined goal. Start with a specific type of debt, most people carry debt from many creditors. Here are some things to consider.

  • What do I want to accomplish?
  • What is the benefit when I accomplish this goal?

Specific goal: “I want to get out of my credit card debt, so I can start saving for a house.”

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Measurable

Make sure to track your progress because you can only accomplish what you can measure. How do you know when you have met a goal if there is no finish line?

  • How much do I have to pay?
  • When will I accomplish my goal?

Measurable goal: “I want to get out of my $25,000 of credit card debt.”

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Attainable

Be aware of what you and your budget can handle. Lofty goals will only discourage you. If it requires you to cut all discretionary spending you’ll be miserable and have to desire to keep to your budget. There is no need to live on Raman noodles to pay off debt.

  • Do I have the finances to accomplish my goal?
  • Can I focus my finances to accomplish my goal?

Attainable goal: “I want to pay off an extra $200 toward my credit card debt.”

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Relevant / Realistic

Even the smallest step moves you forward. Break your big goals into manageable steps. If it’s credit card debt only focus on one card at a time.

  • Will this help me achieve my ultimate financial goal?
  • Is my goal a realistic stepping stone toward my objective?

Relevant / Realistic goal: “Pay off an extra $200 towards the current balance of $1,200 on my highest-interest credit card.”

Time-Bound

There are many ways to approach which debts to pay off first. Your timeline will depend on the method you chose. How you tackle them depends on your personality. The snowball or rollup method plays to your psychology by giving you quick wins. While the avalanche or meltdown method focuses on your finances by allowing you to save money.

  • Is my deadline realistic?
  • When will I achieve my goal?

Time-bound goal: “I want to pay off my $1,200 balance in 6 months ”

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S.M.A.R.T.

Now that you have gone through the process you should have a final S.M.A.R.T. goal that is focused and actionable.

  • Specific
  • Measurable
  • Attainable
  • Relevant / Realistic
  • Time-Bound

S.M.A.R.T. goal: “I want to stop using my high-interest credit card while I pay off the $1,200 balance in 6 months by putting an extra $200 toward the debt each month. This will help me to start saving for a down payment for a house ”

Make a plan

Whew! Now that the hard part is done it’s time to make your budget. Think about how you manage money now and pick a style that will fit your personality, are you a saver or a spender? There are a few ways to allocate your finances or blend them to create something that fits your lifestyle better. These are the most common budgeting methods:

Percentage-Based Plan

If you are the type of person who needs to know how much they “should be spending” then a percentage-based budget might be for you. The 50/30/20 system is one of the most commonly used percentage-based plans. It’s straightforward and easy to track. With this approach, 50 percent of your income is budgeted for needs, 30 percent for wants, and 20 percent for savings. Your spending is already in categories just add them up and see how they fit in this system.

However, you may find needs and wants a little too broad. Breaking each category by percentage may be more helpful. The average costs and spending habits for your area may differ. Look them up and see how your cost ratio compares to your income.

  • Housing 25 – 35%
  • Insurance 10 – 20%
  • Food 10 – 15%
  • Transportation 10 – 15%
  • Utilities 5 – 10%
  • Medical 5 – 10%
  • Clothing 2 – 5%
  • Recreation 5 – 10%
  • Personal 5 – 10%

You may be living well beyond your means if your spending is well above these percentages. When you are not meeting your goals, it might signal a problem with your budget. Take a hard look at the numbers if housing is over 30% you may want to consider downsizing, if possible.

You can break your income in any way that works for you. Here are a few examples of budgeting rules of thumb:

  • 50/30/20 budget: needs, wants, savings and paying off debt
  • 70/20/10 budget: spending, saving, giving
  • 80/20 budget: needs & wants, savings
  • 30/30/30-10 budget: housing, necessities, financial goals, wants
  • 60/30/10 budget: savings, needs, discretionary spending

Envelope system

If you are a notorious impulse shopper, this is the system to use. After organizing how much money will be allotted to each category you put that cash amount into a labeled envelope. Of course, this works best for variable costs, especially discretionary expenses.

This isn’t easy to do for a mortgage or other fixed non-discretionary expenses, so it’s best to pay them first. Once you’ve spent the money, that’s it, no more for the rest of the month unless you move it from another envelope.

How to Make a Cash Envelope System

The Two-Account Plan

If you are good at tracking money, this may work for you. You have two accounts, a needs account for fixed and non-discretionary expenses and a second account for wants. Today, most employers want direct deposit, use that to your advantage. This system requires deposits to be the same amount each pay period. Dived your income and deposit the appropriate amount into each account.

This method works only with the use of cash and debt. It also requires tracking your spending more closely. Managing a budget effectively will be more difficult if you are not organized.

If tracking is not a bsuit set up a third account for a “pay yourself first” plan, to make saving easier and effortless. Paying yourself before paying monthly living expenses and making discretionary purchases makes this method great because the money is not included in the spending account.

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Adjust your numbers to stay on budget

At this point, you should know if you are living beyond your means or have a frugal surplus. If you have extra income that should be going toward savings. But, if your expenses exceed your income it is time to cut costs.

You have figured out how much you earn and how much you spend. You have set SMART financial goals and decided the best way to allocate your money. But your numbers don’t add up. You need to adjust your budget. There are two ways to fix the gap, make more or spend less.

Reduce spending

Take a hard look at your spending and start cutting discretionary expenses. If your goal is to pay off debt, stop buying things with credit cards and switch to cash. Using plastic distances you from feeling the immediate effect of spending, making it difficult to keep track of how much you’re actually spending. Also, you can’t spend what you don’t have.

You don’t have to go cold turkey on your spending either. Make one a day a week or month a splurge day, just make sure you set a limit. If cutting back on wants isn’t getting your budget balanced, it’s time to look into larger fixed expenses. Shop around for better rates on insurance or maybe consider downsizing your home.

How to Reduce Spending

Additional income

If you have already trimmed your budget, it’s time to look for additional income. As noted in the income section, there are dozens of ways to boost your cash flow. Improve your earning potential by getting a raise at work or start a side hustle that sparks your interests. Find something that will stabilize your budget and help you meet your goals.

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Review your budget regularly

Once you have set your budget you need to make sure it fits your lifestyle. Get in the habit of questioning expenses especially if you are looking to cut costs. In the beginning, you may want to review your budget when you get paid. As discrepancies in overspending are settled, goals are being met, and your budget becomes balanced you can scale back to monthly and then quarterly reviews.

Here are some tips for using your budget daily:

  1. Watch your spending limits versus your actual spending. If it’s mid-month and you’re already reaching a limit in a certain category, slow down.
  2. On the other hand, if you just can’t seem to stay on budget in a spending category, you may need to adjust the spending limit. Just remember when you do that you will need to pull back elsewhere.
  3. Treat your savings as an expense. It should actually be a fixed expense so you “pay yourself” appropriately every month.
  4. Relocate your funds when your goals change or have been accomplished.

As time goes on make sure your budget continues to reflect your situation. Did you get a raise? Put that extra money into savings or pay off debt. Did you lose your job? Cut back on some expenses.

Are you expecting a baby? Big life events have big financial consequences make sure you are planning for the future you want.

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Budget models to keep you on track

Budget models are different approaches or methods used to create a budget. These models can be used to forecast and plan for future expenses, income, and financial goals. The choice of budget model depends on the household’s needs, financial goals, and resources. Different models have their strengths and weaknesses and can be applied in various situations.

A static budget

A static budget is the classic form of budgeting, It involves creating a budget at the start of the budget period based on fixed assumptions, such as expected income and expenses. The budget would be fixed and would not change during the budget period, regardless of changes in income or expenses.

For example, a household might create a static budget at the start of the year based on expected income and expenses, such as rent, groceries, utilities, and savings goals. If their income were to increase or decrease during the year, or if they had unexpected expenses such as a car repair, they would not adjust the budget to reflect the new income or expenses.

The advantage of static budgeting is that it provides a clear benchmark for measuring actual performance against expected performance. However, the disadvantage is that it does not account for changes in income or expenses that may occur during the budget period.

In a household context, static budgeting may be suitable for households with stable income and expenses, where changes are unlikely to occur during the budget period. However, for households with more volatile income or expenses, a more flexible budgeting approach, such as rolling budgeting or flexible budgeting, may be more appropriate.

This is the goal of a budget because you are financially stable with savings for emergencies. Any extra income would go toward savings and not debt. There would be no surprise expences you couldn’t handle.

Zero-based budgeting

Zero-based budgeting (ZBB)is the epitome of a balanced budget. With the zero-based budget, every cent is counted and each penny has a plan for anticipated expenses, income, and savings goals. This is not living paycheck-to-paycheck. Your expenses are adjusted and anything extra is given a purpose to achieve your financial goals.
For example, a household using zero-based budgeting might start by listing all their essential expenses, such as rent, utilities, groceries, and transportation costs. They would then identify discretionary expenses, such as entertainment or dining out, and decide which expenses to cut or reduce to meet their savings goals. They might also consider ways to increase their income, such as taking on a side job or selling unused items.

The advantage of zero-based budgeting is that it encourages households to be more mindful of their spending and to prioritize their savings goals. By reviewing every expense and justifying each dollar they plan to spend, households can identify areas where they can cut costs or find alternative solutions.

However, zero-based budgeting can be time-consuming and requires a significant amount of effort and attention to detail. It may not be suitable for households with limited time or resources. In addition, it can be challenging to forecast future expenses accurately, particularly for unexpected events such as medical emergencies or home repairs.

Overall, zero-based budgeting can be a useful approach to household budgeting for those who want to take a more deliberate and strategic approach to manage their finances.

Flexible budgeting

Flexible budgeting is a budgeting approach that adjusts the budget based on changes in actual income or expenses.

For example, if a family’s income increases unexpectedly due to a raise or bonus, they could adjust their budget to allocate more funds towards savings or investments. On the other hand, if they experience a sudden expense such as a medical emergency, they could adjust their budget to reduce spending in other areas to cover the unexpected expense.

Flexible budgeting can be especially useful for households with irregular income, such as freelancers or those who work on commission. Rather than trying to create a static budget that assumes a consistent income level, a flexible budget can adjust to changes in income over time.

Incremental budgeting

Incremental budgeting is a budgeting approach that involves making small adjustments to the previous budget based on changes in the coming period.

For example, if a family’s income increases slightly, they may increase their spending on entertainment or hobbies by a small amount. Conversely, if they experience a slight decrease in income, they may reduce spending on discretionary items such as dining out or vacations.

Incremental budgeting is useful for households that have relatively stable income and expenses and do not experience significant changes over time. It can also be a useful approach for households that prefer a simple budgeting process that does not require frequent adjustments.

The rolling budget

The rolling budget is a budgeting approach that involves regularly updating the budget to reflect changes in income and expenses.

For example, if a family’s income increases or decreases, they would update their budget to reflect the new income level and adjust their spending accordingly. Similarly, if they have unexpected expenses, such as car repairs or medical bills, they would update their budget to reflect the new expenses and adjust their spending in other areas to accommodate the additional costs.

The rolling budget is a useful approach for households that experience frequent changes in income and expenses. By regularly updating the budget, households can ensure that their budget remains relevant and accurate, which can help them make better financial decisions.

One potential downside of the rolling budget is that it requires regular maintenance and attention to ensure that the budget is up to date. This can be time-consuming and may not be suitable for households that prefer a more hands-off approach to budgeting.

The rolling forecast

The rolling forecast is a budgeting approach that involves regularly updating a forecast of future income and expenses based on actual results and changes in the economic environment.

For example, if a family’s income increases or decreases, they would update their forecast of future income and adjust their forecast of future expenses accordingly. Similarly, if they have unexpected expenses, such as a major car repair or medical bill, they would adjust their forecast of future expenses to account for the additional costs.

The rolling forecast is a useful approach for households that want to plan for the future and make better financial decisions based on more accurate information. By regularly updating the forecast, households can anticipate future financial needs and make adjustments to their spending and savings plans accordingly.

One potential downside of the rolling forecast is that it requires a significant amount of effort and attention to maintain. It may not be suitable for households that prefer a more hands-off approach to budgeting or that have relatively stable income and expenses.

As your finances become more stable you may find one method works better than another. These are not hard structures you need to follow but guidelines to creating a budget that work for you.

If you are struggling to balance your budget because of debt. Debt.com can help you find a solution.

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Budgeting FAQs

How many budget categories should I have?

The number of budget categories you have will depend on your individual financial situation and goals. Some people find that having a few broad categories, such as “housing,” “transportation,” and “entertainment,” is sufficient for their needs. Others may benefit from having more specific categories, such as “rent,” “utilities,” “gas,” and “groceries.”

It’s important to create a budget that works for you, so you may need to experiment with different numbers of categories to find the right balance. Some budgeting tools and resources can help you create a budget with a recommended number of categories based on your income and expenses. Alternatively, you can create your own categories to suit your specific needs.

How do I budget for one-time expenses?

One-time expenses are expenses that don’t occur on a regular basis, such as a car repair or a vacation. Make a list of all the one-time expenses you expect to have in the coming year, and estimate the cost of each one. Set aside funds for each expense. To prepare for one-time expenses, you may want to set aside a specific amount of money each month in a separate savings account or other savings vehicle. This will help you save up for the expenses without affecting your regular budget

How do I budget if my income fluctuates?

If your income fluctuates, you may need to take a few extra steps when creating your budget to ensure it’s accurate and effective. Budget based on your average income. When creating your budget, use your average income as the starting point, rather than your highest or lowest income amount. This will help ensure that your budget is realistic and achievable, even when your income fluctuates.

Create a plan for handling excess income. If you earn more than your average income in a given month, consider setting aside the extra money in a savings account or other savings vehicle. This will give you a cushion to fall back on if your income drops in the future.

Create a plan for handling shortfalls. If you earn less than your average income in a given month, you may need to make some adjustments to your budget. This could involve cutting back on discretionary expenses, using funds from your savings, or finding other sources of income, such as taking on a part-time job.

Review and adjust your budget regularly. It’s important to regularly review and adjust your budget to make sure it’s still accurate and effective, given your fluctuating income. This can help you stay on track with your financial goals and avoid overspending or falling into debt.

Which budgeting system works best?

There is no “best” budgeting system that works for everyone, as different people have different financial goals and needs. Some people may find that a simple, straightforward budgeting system works best for them, while others may need a more complex system to manage their finances effectively.

Ultimately, the best budgeting system for you will depend on your individual financial situation and goals. It may be helpful to try out different budgeting systems to see which one works best for you.

What happens if I go over budget?

If you go over budget, it means you’re spending more money than you have allocated in your budget. This can put you at risk of overspending and falling into debt, so it’s important to take steps to get back on track.
Here are some steps you can take if you go over budget:

Identify the cause of the overspending. It’s important to understand why you went over budget so you can avoid making the same mistake in the future. For example, did you underestimate your expenses, or did you make an unplanned purchase?

Adjust your budget to reflect the overspending. If you went over budget, you’ll need to make some adjustments to your budget to account for the extra money you spent. This could involve reducing your spending in other areas, or finding ways to increase your income.

Cut back on discretionary expenses. To get back on track with your budget, you may need to cut back on discretionary expenses, such as dining out, entertainment, or shopping. This will free up money to cover the overspending and help you avoid going over budget in the future.

Review and adjust your budget regularly. To avoid going over budget again, it’s important to regularly review and adjust your budget to make sure it’s still accurate and effective. This can help you stay on track with your financial goals and avoid overspending.

Seek support if necessary. If you’re struggling to get back on track with your budget, it may be helpful to seek support from friends, family, or a financial advisor. They can provide guidance and advice to help you manage your finances more effectively.

Should I focus on making more money instead of cutting expenses?

It’s important to focus on both making more money and cutting expenses when it comes to managing your finances. While increasing your income can help you improve your financial situation, reducing your expenses can also have a significant impact.
Here are a few reasons why it’s important to focus on both making more money and cutting expenses:

Increasing your income can help you reach your financial goals faster. If you have specific financial goals, such as saving for a down payment on a house or paying off debt, increasing your income can help you achieve those goals more quickly.

Reducing your expenses can free up money for savings and debt repayment. By cutting back on discretionary expenses and finding ways to save money on essential expenses, you can free up more money to put toward your savings and debt repayment.

A balanced approach can help you avoid overspending. Focusing solely on making more money can lead to overspending and accumulating debt, as you may be tempted to spend the extra income on non-essential items. By focusing on both making more money and reducing expenses, you can avoid overspending and stay on track with your financial goals.
Ultimately, the best approach to managing your finances will depend on your individual situation and goals. It may be helpful to focus on both making more money and cutting expenses to improve your financial situation and achieve your financial goals.

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