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Budgeting
If you are ready to start saving or investing but do not have a lot of disposable income, you may need to create a budget. Here’s what to do:
- Write down your income.
- Create a list of your fixed monthly expenses like rent.
- Track your incidental spending for a month. Your credit and debit card receipts may help you track your expenses.
- Allocate a specific amount for saving or investing.
If more money is going out than coming in, you need to cut back. Here are some steps to take:
- Examine your spending habits.
- Set a spending limit.
- Give yourself an allowance and don’t exceed it.
- Curb your impulse buying.
There are investments you can make on a shoestring budget. Many mutual funds waive minimum investment requirements if you agree to invest a small amount each month. You can arrange for automatic deductions each month from your checking or savings account. By doing so, you put your investments on autopilot.
Even if there’s no room in your budget for investing, no matter how much you cut back, don’t give up. If you get an unexpected gift or windfall, consider investing it. Think about working a few more hours each week and use the money to invest.
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