Personal Finance

Introduction to Budgeting

Creating Your Budget

When it comes to getting your finances in order and starting to invest, you need to follow an overarching set of principles. First, you need to set your financial goals. This means setting a time horizon, establishing priorities, and evaluating how much risk you want to take. It is extremely important to stick to your plan and to reevaluate and adjust the plan over time based on your circumstances. 

Additionally, you need to become familiar with the different investment vehicles and types of assets in order to feel comfortable making invest decisions. Later units will look at the different types of assets, but feel free to also look at the investment tips and Q&As on our instagram that address some of these topics.

When planning out your financial goals, it is important to figure out how to allocate your money by creating a budget and deciding how much money you can reasonably spend, save, and invest.  To do this, you need to figure out what your after-tax income is. The easiest way to check this number is to look at your monthly bank statement and to look at your earnings or deposits. You should also consider your 401k contributions, i.e. how much are you automatically saving for retirement. 

Budgeting and Budget Plans

Before choosing your budget plan, you should look at your current expenses. Most online banking apps let you break down your spending into different categories from health to restaurants to transportation. While you can adjust your spending on say restaurants and shopping, it might be more difficult to cut your spending on other categories, for example, transportation and basic living expenses. 


The next step is to choose your budget plan. Here are a couple of examples and their principles:

The Envelope System
Pay Yourself First
The Zero-Based Budget

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HerCapital is not a registered investment, legal or tax advisor or a broker dealer. All investment / financial opinions expressed by HerCapital are intended as educational and reflect the personal research and experiences of the team. HerCapital holds no responsibility or liability for any errors, losses or damages incurred as a result of any individual actions based on the provided information on any of our communication platforms or events.