Step-by-Step Budgeting Guide
Let's break down budgeting into simple steps.
- Write down all of your income.
- Subtract all of your non-discretionary expenses. A non-discretionary expense is one you cannot live without, such as food, utilities, rent/mortgage, and transportation to work.
- Subtract all of your discretionary expenses. A discretionary expense is an expense that you don't need but you want in your life. This includes eating out, entertainment, and subscriptions.
- Track your expenses each month.
- Reduce your expenses, specifically discretionary expenses, and save/invest 15% or more of your monthly take-home pay for your future.