🧾 Budget

Why a budget is the foundation

"Budget" is the word you read most often when it comes to personal finance. It's simply about knowing where the money goes. If money comes in, and after 15 days it's gone without you fully knowing why, then you need a budget. Honestly, 99% of the people in this world should really have a budget. You don't need to follow it religiously, but you should at least know which fixed expenses you have.

A budget is your foundation because it gives you an overview of your money. Then you know where the money goes — and you can decide for yourself whether it should really be going everywhere it goes.

How to set up your first budget

You simply start by figuring out where the money goes. Check your bills and start simple. Maybe the first month your budget is only the expense of fuel for a car or moped, if you're young. Over time your budget will include expenses for your vehicle, electricity, rent or mortgage, car loans, and so on. Start with what you know, and expand as you go.

The budget as a living habit

As your budget starts to contain quite a few things and you begin to get in control, you can start trying to estimate your spending a little. How much do you think you spend on food? Coffee? Enter amounts, and update them over time. It's not meant to be over the top, but it can often take 12 months before a budget is complete and you're able to "hit" it every month. If you manage to "win" the budget game, it means you kept everything you agreed with yourself. No extra expenses. In our world, that's a bit unrealistic — but incredibly fun when you hit the mark.