A budget is a recording system or log that keeps track of how much money you have (e.g. your income, wages, etc.), where the money must go towards (e.g. bills, expenses, etc.) and if you have any overages you may put towards your savings or your leisure. Your budgeting plan ensures you’re putting your money towards your priorities and managing it well to make sure you can afford to fund your desired lifestyle and set achievable savings goals. With a budget, you have a plan for your spending and understand where your financial health currently stands. Remember, a budget is a living document. Nothing is set in stone, so change it as needed to fit your goals and financial situation.

A budget shows you:

How much money you make

How you spend your money

Start a budget by gathering your bills and pay stubs. Think about how you spend money, besides paying your bills. For example, do you eat out for lunch every day? After a month, that lunch money could add up to an expense you might write down.

When you have your bills and pay stubs: