*What Are the Different Types of Budgets And How Do I Create One?*
There are many ways to create a budget, and the option you choose may depend on what your financial goals are for the budget. Are you creating an annual household budget? A vacation budget? Paying off debt? No matter the type of budget you seek to create, there are four main principles involved: 🧐
*Outline your income:*
How much comes to your pocket every time? Like how much do you earn from full-time jobs, side hustles, government support or other financial support you may receive. If you’re married or living with someone, be sure to include their income as well if they are a part of your budget. Just take an inventory of all income coming into your pocket/purse.
*Determine your expenditures.*
Write down all of your expenses, from clothing to rent and everything in between. Having a full understanding of your financial responsibilities can help you see how much money you may have leftover for other items.
*Set your scale of preference.*
After reviewing your income and expenses, set your items in order according to priority. What is most important? What is least important? Paying items off in this way will help you maintain your quality of life over quantity of things you want to buy or do.
*Establish your timeline.*
Determine how much time you want to give yourself for your budget. If you’re budgeting to save for a vacation, your budgeting timeline may be shorter than those who are budgeting for an entire household for one year. Your timeline will depend on the goal of your budget.