How to Save Money by Creating a Monthly Budget

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The key to financial freedom is to save money and invest it so that it grows passively over time. The more money you can save, the quicker you will be able to reach your goals.

I always knew this and understood that I needed to increase my savings in order to become wealthier. When my wife and I got married, it quickly became apparent that we needed to track our expenses closely to be able to save appropriately.

We were able to save more money every month by creating a monthly budget. A budget is one of the most powerful tools that you can use to improve your financial stability.

What is a Personal Budget?

A written personal budget is a way to track your income and expenses. It shows exactly where your money is going each month and if you actually are saving anything. By tracking your spending habits, you’ll better understand if there are areas you can cut back on.

At the base of it, a personal budget is a mathematical equation. Your monthly savings is equal to your income minus all of your expenses. If your savings turn out to be negative, you are actually over-spending and would have to dip…