How to plan a budget

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

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, entertainment? After a month, that coffee, education and entertainment money could add up to an expense you might 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 in your expenses: you are spending more money than you make. Look for things in your budget you can change.  Maybe there’s something you do not need, or a there is a way to spend less.