![]() You may also want to set aside money for a new car, a new home or a long-overdue vacation, or use your extra money to begin investing. That way, you'll be able to handle unexpected costs, including an unexpected period of unemployment, without going into debt. Many personal finance experts suggest creating an emergency fund to cover up to six months' worth of expenses. Once you've adjusted your budget to allow for a little financial wiggle room every month, you can start thinking about your long-term financial goals. You may also want to cut back on your spending, whether that means canceling a few streaming services or consolidating your debt. Will you have any money left over, or do the numbers suggest that you might spend more than you earn? If your estimated expenses exceed your anticipated income, your first financial goal should be to earn more money. Take a look at your anticipated income and expenses for the following year. Other expenses, such as groceries, may differ, but you can use your bank and credit card statements to calculate the average amount you pay every month and add those numbers to your budget.Īt this point, you should have a rough idea of how much you plan to earn in 2023 and how much you plan to spend. Some monthly expenses, such as rent, are nearly always the same amount. Consider where your money goes and include budgeting categories for anything you purchase often.Īt this point, you can begin estimating your anticipated monthly expenses. Instead of having a single budget category for entertainment, for example, you might choose to have separate categories for books, music, movies, concerts and streaming media. Some people divide these line items even further. These are the items you buy regularly, even if you don't spend the same amount of money every month. Once you've determined your fixed monthly expenses, consider your variable monthly expenses. Utilities (electricity, water, cable/phone).You can begin by creating a budget line item for every major monthly expense, such as: Once you've calculated how much money you can anticipate earning in 2023, it's time to start thinking about how much you'll spend. ![]() By doing so, you'll be able to manage any changes that may take place over the next year, whether you earn more, less or exactly the same as you anticipated.
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