Evaluate Your Current Situation
People can fall in a hole when evaluating their current situation if they get too nitpicky. They often think that if they do this they have to do it right. But focusing on too many details for too long could lead you down a wrong path that could, eventually, cause you to give up on budgeting altogether.
Breaking your expenses into categories will make everything a lot easier. These easily digestible pieces won’t make you feel overwhelmed. Think housing, entertainment, debt payments, eating out… these should be some of your categories, but you have to cater these to your own lifestyle.
Which of these are fixed? Which can you change throughout the year? Which categories are discretionary? If they’re made up of non-necessary items or experiences then you’ve at least identified a place where you could be spending less in the future.
