A Budget- It's a plan for all of your dollars.
Budgeting involves figuring out how much money you have coming in, how much you need to spend on things like bills and necessities, and how much you want to save, and how much you spend on things you enjoy.
How To Set Up a Budget
Calculate your total NET INCOME for the month (that's the amount of money you have to spend).
- Calculate the total EXPENSES for the month (what you spent on needs, wants, and what you put into savings)
- Then calculate: NET INCOME - EXPENSES = dollars that need a plan*
*If your calculation ends with a negative number, look for places to reduce or cut expenses.
Remember that budgeting is a skill, and to improve a skill, one must practice. Review your budget at least once a month.
Monthly net income: $1000
Wants: $300 - you still get to do the fun stuff!
Paying off debt is considered savings too!
Budgeting Fun Facts
In the largest study of millionaires ever conducted for his book Everyday Millionaires, money expert Chris Hogan shares that 93% of millionaires say they stick to the budgets they make. (2019)
- Around 33% of millionaires never earned more than $100,000 as a household in a single working year, according to Chris Hogan's study, and only 31% averaged $100,000 a year.
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