One skill that is often overlooked but is crucial for financial wellbeing is budgeting. In its simplest form the most essential elements for budgeting are: income and expenses. Budgeting is only creating a plan for how you are to spend and save your money over a certain period. In a first step is identifying your income, have a list of all the money you receive month to month, if it changes, try to stay on the safe side and plan accordingly. Then look at expenses, they usually fall under two categories: fixed expenses that stay the same month to month, and variable expenses which tend to go up and down.

Reflect on your budget:

  • If you are saving for something, is it a need or a want? Weigh the pros and the cons.
  • Have your expenses surpassed your income in the past?
  • How did you make up for the difference?
  • Was it with your savings or with debt or a loan?          

There are many tools to help you budget: spreadsheets, our budget assistant, or other apps. Explore the documents and develop a strategy that works for your life. It’s best practice to question. Do I need this? 

Great! Why not learn more about the importance of managing your budget?
If you’re not quite ready yet, learn more about the importance of managing your budget.