Many families are struggling to stay within their financial means, but a strategy called the Magic Number could help you with sticking to your budget.
Financial wellness coach Dr. Darla Bishop developed the Magic Number strategy and explained that many people are budgeting backwards.
“We’re budgeting backwards because we do it based on what our budget should look like, should be doing, where our money might be going,“ Bishop said.
Instead, she encourages you to go back and look at your receipts, pull your credit card statements, your bank statements, your Venmo and Cash App feeds for the last 90 days to see where your money actually went and how much it truly costs you to live your life.
Bishop said that it’s not the rent and utilities that throw you off of your budget, but it’s the other spending. She said to go back and add that spending into your budget so that it becomes more realistic and you can actually follow your budget.
Bishop encourages you to make a spreadsheet or write your budget down on paper.
Watch the video above to see more of her advice.