A budget is a system that helps you decide how to spend and save your money and keep track of where it goes.
A budget can be as basic or as detailed as you want it to be. In today’s digital age, there are a number of websites and phone apps that can help you get started. When you create a budget, you create a roadmap for your financial future.
There are many advantages to budgeting:
- It allows you to think critically about your needs versus your wants;
- It can help you pay off debt;
- It can help you save for both short-term and long-term goals, and
- It reveals the areas of your life in which you overspend.
If you do not already have a budget, you can start by categorizing your spending. Here are a few examples of categories you can use:
- Savings (in retirement or other types of plans)
- Rent or mortgage payments
- Personal care
- Gas and transportation
- Debt repayment
A financial advisor can help you review your spending habits and develop a budget that allows you to save money and spend on the things that matter.