After identifying your financial goals and establishing a plan to achieve those goals, you can establish a budget to save the money you need. You might think that you don't need a budget and can save money without one, but everyone can benefit from a budget.
A budget is a tool to help you understand where your money goes. If you own a business, knowing how to budget will help you understand how money flows in and out of your business. There are three steps to creating a budget.
- 1-Identify Your Net Monthly Income
Identify the money that comes into your household after all of the deductions have been made, such as taxes, Social Security insurance, etc.
- 2-Identify Your Monthly Expenses
Your expenses are the things you spend money on. Be sure to include expenses that occur every month like rent and phone bills, as well as expenses that occur periodically like car insurance and medical bills.
- 3-Subtract Your Monthly Expenses from Your Income
If you have money left over, you can decide how to spend or save that money. If your expenses are greater than your income, you and your family have to decide which expenses can be reduced or decide how you can earn more income.
Your Personal Financial Statement
In addition to creating a budget, consider creating a personal financial statement. Personal financial statements are often used if you get a business loan. If you want to get a loan, most lenders will want to know about your personal financial 
profile. Your personal financial statement outlines all the information about your personal finances including:
- Assets (everything you own such as money, cars and investments)
- Liabilities (all of your debts).
Subtract you liabilities from your assets to calculate your net worth, which is your total financial worth. Use the Personal Financial Statement from ACCION USA to determine your net worth.
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