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I’d like to invite you to join my community on Patreon if you want to improve your relationship with money.EveryDollar vs YNAB, compared, may leave you feeling like there’s not that much of a difference between the two. This article will help you align to financial benchmarks and to figure out what your next goal should be.
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Check out the article on the 50/30/20 rule next to see how your spending aligns. Now, it’s important to see if your spending is sustainable. You will need to set up a ritual to reflect on your spending at the end of the month, and around the start of the year to make achievable goals. Luckily most budgeting apps or online banking will do this for you overtime if you stay on top of categorizing your purchases. Do you need to earn more to make ends meet? Do you have enough funds set aside for an emergency? Can you afford to spend more on things you care about by cutting out something you don’t? This step will really put you in a position to make some executive decisions about your life. The reason we categorize purchases as they come in is so we can look at monthly and yearly reports to get an idea of where we are headed. I’d recommend starting your budget and then returning to this section later if you have not done that yet. We could not manage anything without collecting all that information, so kudos to you for putting in the hard work. It pays to plan, as you can save a lot of money by paying for things yearly instead of monthly. This includes stuff like taking your cat to the vet or the eventual car break down. True Expenses: Something that you must pay for infrequently or yearly. This section will help you untie money and guilt, if that is something you struggle with. We all have our priorities.įun Money: Any budget that does not include realistic amounts for lattes and eating out is doomed to fail. Purchase Goals: Long term goals like buying a house or a $5000 fursuit. You can trim from other areas to boost your payoff date and break those shackles. Savings & Investing: Treat this like an expense, because if you aren't contributing to this category, you are robbing your future self and robbing an old person is just cruel.ĭebt Payments: Debt sucks. This can include electricity, water, therapy etc… Monthly Bills: Stuff that you pay for each month to stay warm and sane. Rent/ Mortgage: Separate this out because it tends to be such a big chunk of income. Be as honest as possible, because this will be used later to find ways to mercilessly trim unneeded expenses from your life.
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This will help you measure your spending and get an idea of where you are headed financially. Going forward you will need to start categorizing your purchases. There are plenty others, but I’m just going to recommend the applications I actually use. I’ve linked the app that I use for tracking expenses, debts, and net worth. This will either be your banks website, a spreadsheet, or a budgeting app. This article will give you the foundation to work on improving that relationship. By creating a budget, you can change your relationship with money. Everybody should keep a basic budget, because checking your account balances and “feeling” like you can afford something doesn't cut it. It has a bad connotation for being restrictive, but you will find that it gives you the freedom to own your finances. Budgeting is aligning your money with your priorities.