Sitting down to figure out your budget can be a daunting task, especially if you don’t know where to start or what you’re specifically budgeting for. The following tips offer simple ideas to help you get your finances on track once and for all.

SET SHORT- AND LONG-TERM GOALS.
Ask yourself, “Where do I want to be a year from now? Do I need to look into getting a new car? Is my family outgrowing our current home?” These are just a few questions that will get you thinking about long-term plans and will help you create a budget that makes sense. On the other hand, short-term goals are also vital. Things like paying off your credit card balance, setting up a savings account, and saving for personal items you’ve had your eye on are all important components that need accounting for.

CREATE A SPREADSHEET.
Keep track of how much you’re spending in different categories such as entertainment, food and dining out, utilities, loans and paying off debt, rent or mortgage, groceries, and general shopping. After a couple of weeks, you’ll be able to clearly see where your money is going and determine which areas you
can cut back on.

STICK TO THE 50/30/20 PLAN.
If you’re the type of person who knows you won’t stick to a budget unless a strict plan is put in place for you, the 50/30/20 method may be perfect for you. This simply means 50 percent of your income goes toward essentials, 30 percent toward nonessentials, and 20 percent goes straight into savings and paying off any debt. This plan doesn’t come with a whole lot of flexibility, but that’s the point—you’ll be able to save for your dream home that much quicker.

If you’re wondering, “All of this is great, but how do I actually stick to a budget?” follow these tips:

• Keep a separate budgeting notebook, and record your spending at the end of every day or even throughout the day.
• Not a pen-and-paper kind of person? Download a budgeting app, and turn on notifications. Mint, Acorns, and PocketGuard are great user-friendly options.
• Split up your money into different bank accounts. Having an account specifically for spending will help ensure you don’t go overboard.
• Take out a set amount of cash each week, and leave your credit card at home. Strict? Yes. Highly effective? Also yes!