How to plan a budget

A budget is a plan you develop to decide how you will spend your money over a certain period (every day, week, month, or year). This plan shows you: how much money you make and how you spend it.

Budget planning is as simple as that:
  • Start a budget by gathering your bills and pay stubs: think about how you spend money, besides paying your bills. For example, do you buy a cup of coffee every day? Do you pay for education, or entertainment? After a month, the money spent on coffee, education and entertainment could add up to an expense you might want to write down.

  • When you have your bills and pay stubs: write down your expenses (the money you spend).

  • Write down how much money you make: in other words: what is your income

  • Subtract your expenses from how much money you make

  • Pay attention to your expenses: you are spending more money than you earn. Look for things in your budget you can change. Maybe there are some expenses you can reduce or eliminate.

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