AdobeStock_425247695_1_YArwZ8U.jpeg (AdobeStock_425247695_1_UqYkjNz.webp)If you are focusing on recovery and looking to start budgeting for the future, you are one step in the right direction.

Whether you’re currently enrolled in a treatment program or embarking on a new journey after rehab, you may be wondering what life after active addiction looks like. To become the best version of yourself, taking control of your finances and establishing a budget is a great place to start. In the beginning, budgeting your money may seem overwhelming.

Although having a budget may not be a quick fix, it will ensure that your money over time will be properly distributed, so you can live within your means. The key to budgeting is planning for the future and keeping your finances organized. The first step before creating your budget is to consider the financial goals you want to achieve.

Consider implementing the following budgeting tips that can help you pave a clear path toward your financial future.

Set Financial Goals

Determine your goals by sitting down and deciding what you want to achieve financially. These goals often can exist in two categories, long-term and short-term.

Short-term goals are those you can achieve within a smaller time period. These goals might include saving for a vacation, paying off credit card debt, building an emergency fund, or saving up for minor home repairs. Long-term goals are usually more costly and take longer to achieve. These may include building a retirement fund, setting money aside for a college education, paying off a mortgage, or purchasing a home. Sometimes your long-term goals can be short-term as well. If buying a home soon is one of your goals, it does not have to be unattainable. Finances can be stressful when buying a house, especially when you are trying to budget your money. If money is tight, you should look into an FHA loan(opens in a new tab). This is a Federal Housing Administration-backed loan that offers low down payment options and a lower minimum credit score limit.

Foremost, your short-term and long-term goals will be important to help you stay focused on your financial budget. Now that you have goals in mind, your next step is to group your expenses into categories.

Create Categories For Expenses

Putting your expenses into categories will help you determine where you are spending most of your money. There are three different types of expenses(opens in a new tab) you need to familiarize yourself with.

Fixed Expenses

Fixed expenses usually are paid in monthly intervals. The fixed expenses you should be prioritizing in your budget include your rent or a mortgage, car payments, debts, and insurances such as health, life, and auto.

Variable Expenses

Variable expenses are your weekly or frequent purchases that can vary slightly depending on circumstances. Examples of variable expenses are groceries, clothing, gas for your vehicle, and any personal items.

Periodic Expenses

Periodic expenses are similar to fixed expenses in the sense that they occur less frequently. For instance, a periodic expense could be an oil change or inspection for a vehicle, buying gifts for holidays, and paying taxes.

One way to evaluate these expenses in your budget is to continue to copy over the previous months’ bills. You should make an effort to keep track and categorize every transaction you make. Once you have an idea of how much you are spending, you can then determine a budget for each category.

Constructing a Budget

After examining your expenses and where you are spending the majority of your money, you can now create your weekly and monthly budget. First, evaluate your net income each month. Your net income is the amount you receive after all deductibles such as taxes. Then, start allocating your money to each category, ranging from most important to least important. Generally, your needs that you absolutely cannot live without should be prioritized in your budget. If you are unsure of how to distribute your money, try using a sample budget(opens in a new tab) to help guide you at first.

Once you can visualize how much money you are going to spend on each category every month, it is crucial to keep track of what you spend, so you can make sure you are sticking to your spending plan. If you happen to notice that your budget is not working for you, don’t be discouraged to change it up.

Adjusting to a Budget

If your budget is not working, try adjusting it for the next month. It may be difficult at first to figure out what works best for you. Over time, you will discover the best fit plan that satisfies your needs. Having a budget that works will allow you to eventually start saving more for the future. You will be surprised by how helpful a spending plan can be when it comes to setting yourself up for financial freedom in the years to come.

Overall, it’s not about how much money you make, but how you budget it. Monitoring the amount you spend and keeping track of your expenses with a budget is the ultimate way to achieve your financial goals. Don’t get discouraged if it all seems overwhelming at first because chances are, it will be. Remember to have patience, and it will all become second nature eventually. On top of staying organized and planning, make sure you have a good support system behind you because knowing you are not alone is the best way to make sure you are on the right path for your future. Good luck and know you are strong and can achieve anything!