Begin Monthly Budgeting

They say that you can’t manage what you don’t measure. That’s never more true than it is with money. You have to know exactly how much you’re spending, saving and investing so you can know where you’re going.

You should start a monthly budget that tracks how much you’re earning and spending. Most consumers divide their spending into various categories, which can be as broad or specific as you want. For example, you could lump all utility expenses in one category or label them separately (water, gas and electric, etc.).

Create a budget that is based on your existing spending habits and then decide if you want to allocate more money to another goal or category. For example, if you’re saving for a down payment on a home, you can make that a line item in your budget so you know how much you’re putting aside every month.

Check in with your budget to track if you’re spending more than you allotted. If you are, see what expenses can be reduced or eliminated. Focus on big-ticket items first, like housing or transportation.