It is about having your money represent what is important to you. And no two budgets are going to be the same. When you start tracking where your money is going, you might be surprised by your spending. The key to having a budget is answering these questions:
– Does my spending match my long-term goals? – If I have a partner, are we on the same page? – Am I spending more than I make? – Do I have enough for retirement, or am I behind where I want to be? – Do I have an emergency fund to cover unexpected expenses? – Does my spending reflect where I want to be in 5, 10, or 20 years?
There are lots of options as far as how to manage a budget. Each has its benefits and cons. I’ve tried several in the past, but have been using You Need a Budget (YNAB) for over three years, and we love it. YNAB has a lot of things I love. The key elements that make this successful for us: