The #1 Thing You Must Do To Save Money This Year

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Money doesn’t grow on trees, but it can slowly add up if you have a strategy to save cash. Do you want to know how you can keep more of the money you earn? Keep reading.

Here’s What You Have To Do To Save Money

The #1 thing you have to do to save money is to create a budget. The importance of one can’t be overstated. No matter what big purchase you make in your life, you’ll need a budget to make it happen.

What Is A Budget?

A budget is a ledger of your financial transactions. The three things every budget has in common are:

A list of transaction
A description of the transaction
Dates of the transaction

A budget is a timelessly effective way to keep track of and control your spending. A workable budget will allow you to keep control of your expenses so that you don’t go into debt every month.

How To Create A Budget

To create a budget, here are the steps you need to take:

Write Down Your Financial Obligations

When you write down your financial obligations, aka bills, you’ll see what you’re working with. They will typically include:

Mortgage
Car note
Car insurance
Utilities
Day Care
Food Expenses
Gas Money
Credit Card Debt
Student Loans

Calculate Your Monthly Income

Next it’s time to gather all your pay stubs to add up how much your net income is at the end of the month. This figure will tell you what you’re capable of spending every 30 days without losing your shirt.

Here are some free budget calculators you can use:

Balance The Two

Now comes the mathematics: Compare your monthly net income to your expenses to find out if you can continue to afford the lifestyle you’re currently maintaining.

Are you saving for a house? If so, then you’ll want to compensate for that money by scaling back on one or two or three expenses.

Continue to trim your expenses if you find that you’re not using some of the things you’re paying for. That includes gym memberships, streaming subscriptions and more.

Final Word

If you’ve ever wondered how much money you actually make each month, the way to do that is by creating a budget.

It’s time you took your finances seriously and start to invest in your future. The easiest way to do that is to know how much money you have coming in and going out each month. Yes, you need to create a budget.

If you value money, you know how hard you have to work to get it. And that makes you want to set some aside when you can. It’s called saving money, and it’s the thing to do today.

Budgeting is the linchpin of proper financial management — and an important first step in saving money.

Don’t think you have to do it all by yourself. Let technology help you budget your money. Here are some free apps you can use that are designed to make budgeting easier.

Your local bank may also have some online tools you can use to help you budget your money better. It doesn’t matter what tool you use, the important thing is that you devise a budget!

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Keisha Smith

Keisha Smith is a Contributing Writer who attended college at Southern University A&M College in Baton Rouge. She is currently writing a book on south Louisiana culture.