Budgeting overview

August 27, 2018

A budget is a plan for every dollar you have. It’s not magic, but it can lead to more financial freedom and much less stress. You cannot thrive for long if you’re spending more than you earn.

How do you decide what’s important and where to spend most of your money? If your expenses outpace your income, what can you do? How can you cope with unexpected major expenses? For all these questions, a budget is the answer.

How to create a budget

  1. Figure out what you earn (after taxes): If you get a regular paycheck, the amount you receive is probably your after-tax income (due to tax withholding), but if you have automatic deductions for a 401(k), savings, or insurance, add those deductions back in to give yourself a true picture of your savings and expenditures. If you receive other types of income, subtract anything that reduces it, such as taxes and business expenses.

  2. Choose a budgeting plan: A smart budget must cover all of your needs and some of your wants, and it must set aside some for emergencies and the future.

  3. Track your progress: Record your spending or use online budgeting and savings tools (like Haven!).

  4. Set yourself up for success: Automate as much as possible, so that money you’ve allocated for a specific purpose gets there with minimal effort on your part. Finding someone to help you stick to your budget can also be extremely helpful.

  5. Revisit your budget: Check in on your budget periodically. Your income, expenses, and priorities will change over time. Adjust your budget accordingly, but always have one.

Money worries can be a thing of the past!

Haven helps you save and invest automatically. Build a safety net, then invest your money without lifting a finger.

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