Capitalwise: Budgeting for Beginners
A simple, easy-to-follow guide on how to create a budget for beginners, helping you save money, pay off debt, and gain control of your finances. This program includes interactive elements and breaks down budgeting into smaller, manageable steps to promote habit formation.
Program Modules
What is a Budget?
Understand the basics of budgeting and its importance in managing your finances. This module provides an overview and sets the stage for the rest of the program.
Identify Budgeting Benefits
DailyList three ways budgeting can improve your financial life.
โBudgeting can empower you to take control of your finances and reduce financial stress.โ
Budgeting Basics Quiz
DailyTest your understanding of basic budgeting concepts.
Step 1: Understand Your Income
Identify all sources of income, including salary, side hustle income, and passive income. Learn to calculate your net income accurately.
List Your Income Sources
DailyIdentify and list all your current income sources.
โTrack net income - how much you actually take home after taxes and deductions.โ
Calculate Net Income
DailyCalculate your average net monthly income after taxes and deductions.
โIf your income fluctuates, take an average of your last 3 months income.โ
Step 2: List Your Expenses
List all expenses, both fixed and variable, to understand where your money is going. Use a spreadsheet or budgeting app to track your spending.
List Fixed Expenses
DailyIdentify and list all your fixed monthly expenses.
โList all of your expenses, both fixed and variable.โ
Track Variable Expenses
DailyTrack your variable expenses for one week and list them.
โDon't forget to include annual or quarterly bills.โ
Step 3: Categorize Your Spending
Categorize expenses into needs, wants, and savings/debt. Analyze your spending habits and identify areas for potential savings.
Categorize Needs
DailyCategorize your expenses that fall under 'Needs'.
โBreak down expenses into needs, wants, and savings/debt.โ
Categorize Wants
DailyCategorize your expenses that fall under 'Wants'.
โIdeally needs should take up about 50% of your income, wants around 30%, and savings should be at least 20%.โ
Categorize Savings/Debt
DailyCategorize your expenses that fall under 'Savings/Debt'.
โIdeally needs should take up about 50% of your income, wants around 30%, and savings should be at least 20%.โ
Step 4: Set Your Financial Goals
Set short-term and long-term financial goals to motivate your budgeting efforts. Make your goals specific, measurable, achievable, relevant, and time-bound (SMART).
Set Short-Term Goals
DailyDefine 1-2 short-term financial goals.
โSet some financial goals.โ
Set Long-Term Goals
DailyDefine 1-2 long-term financial goals.
โBe realistic with your goals, start small.โ
Step 5: Create Your Budget Plan
Develop a budget plan using pen and paper, Excel, or a budgeting app. Allocate your income to different spending categories and ensure it aligns with your financial goals.
Choose a Budgeting Method
DailySelect your preferred budgeting method (pen and paper, Excel, app).
โCreate your budget plan.โ
Allocate Your Budget
DailyAllocate income to needs, wants, savings, and debt.
โStick to your categories.โ
Step 6: Track Your Progress and Adjust
Regularly track your progress and make adjustments to your budget as needed. A budget is a dynamic plan that needs to be revisited and updated regularly.
Review Your Spending
DailyReview your spending habits from the previous week.
โTrack your progress and make adjustments along the way.โ
Adjust Your Budget
DailyAdjust your budget based on the review and upcoming expenses.
โA budget isn't something you set and forget.โ
What You'll Accomplish
- Understand the fundamentals of budgeting.
- Identify income sources and track expenses.
- Categorize spending into needs, wants, and savings/debt.
- Set realistic financial goals.
- Create a practical budget plan.
- Monitor progress and make necessary adjustments.
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