It’s crucial to have a clear understanding of how much money you have coming in and where your money is going before you even try to save. If you live with a partner or split bills with someone, it’s important to go over this information together and create a budget. This allows both of you to be on the same page in terms of finances. Remember, their income and spending affect you too.
On a piece of paper, list the following:
Your income.
Your fixed expenses—these are your essential expenses that must be paid no matter what. Examples include rent, mortgage, loan payments, gas, and groceries.
Your non-essential expenses—these could be your Netflix subscription, gym membership, or cable bill.
List everything you’re spending money on, even the small things, because sometimes we’re not even aware of what we’re paying for. Once you’ve done this, you’ll see areas where you can spend less.
Honestly, if you want to save as much as possible, set aside money only for fixed expenses and save the rest. Most importantly, once you create a budget, stick to it. It may seem annoying at first, and you might not notice immediate benefits, but in the long run, it will help you so much. It also teaches you to be intentional and disciplined in all aspects of your life.