Budgeting for Beginners - How to Make a Budget From Scratch 2021 | Summary and Q&A

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February 26, 2021
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Debt Free Millennials
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Budgeting for Beginners - How to Make a Budget From Scratch 2021

TL;DR

Learn how to create your first budget to effectively manage your finances and achieve your financial goals.

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Key Insights

  • 🥅 Budgeting is an essential tool for paying off debt and achieving financial goals.
  • 👂 Start by understanding your income and listing all your debts with their minimum payments.
  • ❓ Categorize your expenses into fixed, variable, and discretionary spending.
  • 0️⃣ Aim for a zero-based budget where income minus expenses equals zero for optimal financial management.
  • 🤑 Budgeting allows you to be intentional with your money and avoid overspending.
  • 👣 Consider using a spreadsheet or budgeting tool to track your income and expenses effectively.
  • 🥅 Savings for future goals and buffer categories help you prepare for unexpected expenses.

Transcript

budgeting is the number one tool that i use to pay off 35 000 in student loan debt on a 37 000 salary in just under two and a half years so i'm going to teach you the very very basics of how to put together a budget for the very first time hey what's up guys it's justine with debt free millennials the channel to help you crush your debt and live pa... Read More

Questions & Answers

Q: How do I determine my monthly income for budgeting purposes?

To determine your monthly income, review your bank account statements to find your paychecks or average your earnings over the past three months if you're an hourly worker.

Q: Should I include subscriptions like Netflix and Spotify in my budget?

Yes, subscriptions should be included in your budget under the "fun" category, as they are not necessities but rather discretionary expenses.

Q: What should I do if my expenses exceed my income in the budget?

If your expenses exceed your income, you are overspending. You need to reevaluate your budget and make adjustments by reducing expenses or increasing income to achieve a balanced budget.

Q: Is it necessary to allocate savings for future goals in my budget?

Setting aside savings for future goals is crucial for long-term financial planning. Include categories for savings, such as a new car, vacation, or emergency fund, to track your progress.

Summary & Key Takeaways

  • Start by listing your monthly income and all of your debts, including their minimum payments.

  • Identify your fixed expenses such as rent, utilities, and insurance, and estimate your spending on variable expenses like food and entertainment.

  • Set aside savings for future goals and create a buffer category for unexpected expenses.

  • Ensure that your total expenses are less than your income, aiming for a zero-based budget.

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