Be a big-league budgeter
A budget is one of the greatest tools to put you on the road to respecting your money!
A budget helps you keep control of your finances today and tomorrow. With a budget you can track your day-to-day and monthly spending, plan for emergencies and save to meet goals. A budget is a key piece to managing not only your savings, but also your loans.
Picture a budget like a GPS navigating you toward financial freedom! It considers where you are and where you’d like to be, and then helps provide a guide to help you get there.
Remember, it’s not about what you have, but what you do with it that counts. Too often people say they don’t have enough money to budget. You can budget not only your cash, but also things like scholarships or loan refunds.
Want to start a budget, but not sure where to begin or if you can stick to it? Here are 10 tips to help!
- Set your goals. How you spend your money should directly reflect what’s important to you now and in the future. Take some time to think about your life values and goals, and then create three financial goals to match them.
- Be realistic. Your budget must reflect the actual money that you have available (income) and the money that you spend (expenses) on a monthly basis. The more realistic you are about these two numbers, the more likely you will stick to your budget.
- Track it. Before you set your budget, spend two weeks tracking and collecting all receipts for bills and purchases – whether that’s your cell phone, grabbing a snack or a tank of gas. This will help you to start creating a habit of knowing exactly where your money is actually going.
- Needs vs. wants. Sometimes funds get tight. When this happens, you’ll need to make sure your needs (necessary expenses) are met first. A good idea is to list your expenses in order of what’s most important to you financially!
- Save first. Make room in your budget for saving first. Ten percent is ideal, but any amount is great! If you need to, send yourself a bill for the amount you decide to save. Then, make automatic transfers into a separate savings account that you won’t access on a regular basis.
- Give every dollar a name. For every dollar you have, make sure to include in your plan how you will spend it. Life happens, so try to allocate around 5% of your budget for small miscellaneous expenses that may come up throughout the month.
- Plan low for income and high for expenses. If you don’t receive a set amount of income, estimate slightly below the amount you think you will receive. When it comes to your bills, estimate higher than what you plan to pay.
- Pay cash for some everyday purchases. Spending with cash keeps you more conscious of the cost, especially in areas where you tend to overspend. Allocate a weekly amount and use it as often as you can for purchases like snacks, groceries or entertainment.
- Think about the future. Even though a budget is a monthly plan, take some time to think about what you will need for the next several months. Then set some short, mid and long-term goals to help you get there.
- Review and adjust each month. Sometimes you spend more than you planned; other times you spend less. Take a little time to review each month and makes necessary changes before moving into the next month.
Tools and Resources to help you create a budget
There are several tools out there to help you create and maintain a budget. Click here for a downloadable budget document that you can type into and save; or visit one of the resources below to check out even more online tools, including electronic budget options.