![]() Are there places you can cut back?Īre you eating out 5 nights a week? Try cutting it back and save money by buying groceries instead. Step 6: Find Places to Cut Discretionary Spending and Decrease Your Bills You’re taking a new step on your personal finance journey, so don’t stress too much if it’s not perfect! Remember, it might be hard seeing how much is leftover after you subtract your Total Monthly Expenses from your Total Monthly Income. If you’re not able to cut any more, consider finding ways to increase your income with a side hustle or another strategy for putting more money in your pocket every month. If your number is negative, use the next step to see where you might be able to cut some discretionary expenses or decrease some of your regular expenses. There may be room to cut some more to increase that number- check out mynext step! If your number is closer to 0, you’re breaking even. If this number is positive, your monthly income should be higher than your monthly expenses, so you should be saving money every month! Subtract your Total Monthly Expenses from your Total Monthly Income from Step 2. To get your Total Monthly Expenses, add together your Fixed Expenses, Variable Expenses, and Irregular Expenses from Step 3 and 4. Step 5: Add Up All of Your Expenses and Subtract Them From Your Income ![]() Sum up these Irregular Expenses, then divide by 12 months so you know what your “Irregular Expenses” category looks like for a whole month. Remember, these expenses may not come regularly, but you’ll want a way to pay for them when they come up. How much money do you usually spend during the year on: If you can, take a look at your Irregular Expenses for the past year. ![]() Step 4: Check Your Calendar for Irregular Expenses How about Variable Expenses? How much do you spend in an average month on:ĭon’t worry if those numbers are higher than what you expected – we’ll work on cutting some discretionary expenses in a minute.
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