Begin Your Financial Journey: The Budgetnista on Understanding Your Money Through Budgeting

Building financial wellness hinges on establishing a robust budget.

“A budget is a picture of what your money is doing,” shared Tiffany Aliche, also known as The Budgetnista, during a Women & Wealth livestream on CNBC.

“It’s the foundation where you build your financial house. You have to understand what your money is doing,” emphasized Aliche, a renowned personal financial educator and author of “Get Good with Money.” By scrutinizing your expenditures and creating a budget, you may uncover funds to establish other financial safety nets, such as an emergency savings fund and contributions towards retirement.

“You’re supposed to give each dollar a job,” asserted Sophia Bera Daigle, a certified financial planner and the founder of Gen Y Planning in Austin, Texas.

It’s also beneficial to consider your budgets from an annual perspective. Taking on significant new expenses like purchasing a car or a house, or facing unexpected emergencies, can impact your monthly spending, noted Daigle, who is also a CNBC Financial Advisor member.

How to manage the budget in three simple steps

1. Make a list of expenses: Begin by compiling a list of all your monthly expenditures, advises Aliche. “That’s step one.” Include fixed expenses like rent or car payments, as well as variable expenses such as groceries and utilities. Additionally, consider listing expenses that occur irregularly, like annual memberships or quarterly taxes.

Budget Planning
Expense Listing: Compile all monthly spending, including fixed, variable, and irregular expenses, for clarity. (Credits: Unsplash)

2. Check your records: Next, compare your estimates with your actual spending. Review your recent debit and credit card statements to tally up your expenditures for a recent month.

Budget Planning
Record Check: Match estimates with actual spending by reviewing recent debit/credit card statements. (Credits: Unsplash)

3. Figure out how your spending matches with your income: After determining your monthly spending, calculate the difference from your income. Aliche refers to this as “the tears and tissues” step, as many people discover they’re overspending.

Budget planning
Income Alignment: Calculate the difference between spending and income to identify overspending areas.

“A lot of people hold onto the financial mistakes they made in their life,” noted Aliche. Don’t let the “tears and tissues” budgeting step derail you. “Shame shields solutions,” she emphasized.

To move forward, seek support and accountability from your community. Adjust your spending habits to align with your budget and create space to achieve your financial goals.

Additionally, Aliche stresses the importance of recognizing that money is a collaborative effort. “Understand that money is a team sport,” she advises. Surround yourself with a “board of directors” to assist you in reaching your objectives, such as an accountability partner, an accountant, and a financial advisor.

Michael Manua
Michael Manua
Michael, a seasoned market news expert with 29 years of experience, offers unparalleled insights into financial markets. At 61, he has a track record of providing accurate, impactful analyses, making him a trusted voice in financial journalism.
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