With many people living paycheck to paycheck, creating and sticking to a monthly budget is essential for financial health. Learning how to manage money effectively takes time, but using these four tips helps you live your best life financially.

1. Write Down Your Expected Expenses

You have reoccurring bills each month, so you have a basic idea of how much money you need to live. Make a list of expected expenses each month and add them up so you know how much money must come out of your monthly salary for you to live comfortably. Include expenses such as your house mortgage, car note and power bill.

Once you know how much money you spend on bills, you can set a budget for additional expenses such as food, clothing and money you send to family members living abroad. Make sure you include cash you send with an international money transfer app so you have an accurate count of how much money you spend each month.

2. Plan for Unexpected Expenses

Some months, you’ll have unexpected expenses come up that you can’t always plan for. Your kids might need new shoes, or you may need to call a plumber to fix a leak. These expenses, although necessary, can through off your budget.

Allot a portion of your budget to unexpected expenses. If you don’t need the money one month, you can put the cash in savings to cover larger expenses that pop up every few years. You can’t plan for exact expenses if you don’t expect them, but having some money set aside helps you stay on budget throughout the month.

3. Prioritize Your Expenses

Some expenses are more important than others. You must pay your house note each month, but you don’t always need new shoes or clothing. It’s a good idea to give yourself a little fun spending money each month so you can buy a few accessories, books or kitchen gadgets each month for your enjoyment, but you need to make sure you save money for necessary expenses. If you have money left after you cover all of your most important expenses, you are in a good financial situation where you can still lie comfortably if not extravagantly.

4. Make Adjustments as Necessary

Your monthly budget will change over time. As you pay down certain expenses such as credit card bills, you may have extra money to put down on larger expenses such as a vehicle or your mortgage. Instead of loosening up on your budget, take the time to reevaluate your new necessary expenses and restructure your budget to meet your evolving needs. Once you get in the habit of budgeting your money, you’ll be on your way to financial freedom.

If you want to improve the way you manage your finances, creating a monthly budget is a good place to start. It takes time to learn how to stick to a budget, but these tips can help you manage your financial health and allows you to live comfortably on your income without generating additional debt.