The first step in mastering finances.
Having a budget is literally the first step in mastering your finances. Without a budget you’re flying in the dark. Budgets tell you where your money is going (and the size of your Burn Rate), where your money will go, and how big your Emergency Fund needs to be.
Your budget should include:
- How much money are you making?
- From where?
- How much money are you spending?
- To where?
- On what?
Typically budgeting practices utilize budget ‘Categories’. There’s no ‘one way’ to implement a budget or to build your categories. Apps like Mint have dozens (if not 100+) categories pre-built. On the opposite end of the spectrum is a budgeted method like what’s recommended in the Budget Boot Camp NYMO method, which uses 4 categories.
Budgeting means that, because you’ll always be a little worried about money, you’ll never need to be really worried about money. It’s a The Price of Security is Insecurity situation.