Concerned about frittering away your funds? Keep yourself on track with a personal budget. We’ll help you get started

Essential Tips for Creating a Personal Budget
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Where is all my money going? If you find yourself asking that question a lot, it’s time to make a personal budget. Don’t be frightened. A budget doesn’t mean your music festival days are over. Put as much time into planning your budget as you do into planning your next vacation and you’ll wind up with a lot more vacations. Here’s how to get started.

Go Online

“There are plenty of free online tools out there to help you track your spending and separate it into categories such as living expenses, entertainment, and travel, so that you can see exactly where your money is going,” says David Rosell. An Oregon-based financial consultant to millennials, Rosell gives a shout-out to You Need a Budget (YNAB) and GnuCash, but considers Mint “the gold standard” of budgeting apps.

[Mint] “automatically updates and categorizes transactions, creating a picture of spending in real time,” says Rosell, author of the book “Keep Climbing – A Millennial’s Guide to Financial Planning.” “You can set personal budgets that will alert you as you approach your spending death zone.”

Don’t Set Yourself up for Failure

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Santa Monica-based financial consultant Jason Kirsch cautions against starting out with too restrictive a budget.

“If it doesn’t leave much headroom, it’s likely you’re going to fail.” he says. “Then you won’t believe in the system.”

Saving money is important, but so is coffee. Leave yourself a small amount wiggle room.

Do a Paycheck Check

The purpose of a personal budget is to ensure that you have more cash coming in than going out. So to start, you need to consider how much money you make after taxes. Then subtract your essential payments, such as rent, utilities, and gas. Whatever you have left is for spending – and saving.

Swap Cards for Cash

It’s easy to lose track of how much you’re spending when you use plastic for everything. So once you determine how much money you have left each week after the bills are paid, take that “spending allowance” out in cold, hard cash. You can even do it on a day-to-day basis to be safer. If you have a $140 allowance for the week, just stick a $20 bill in your purse every day. When the 20 runs out, it’s time to go home and heat up that frozen pizza. (The struggle is real.)

Don’t Forget about the Future

Rosell recommends beginning budgeters sock away 10 percent of their paycheck for retirement in either an IRA or a 401k, both of which pay you interest and give you tax benefits.

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