A Budget is Helpful for Everyone
Budgeting is an important factor in having good financial health. It is the one tool that puts you in total control of your money and how you spend and save your hard-earned dollars. Writing down your financial goals has shown to increase your success in meeting them.
One of the most important things that budgeting can do is to help identify overspending and thereby control it. This way, money will not simply “disappear” without you knowing exactly where it went.
Creating a budget that works for you does not have to be overwhelming. Start with the basic monthly expenditures and work from there. The Credit Union has created a simple Excel Monthly Budget for you to use. Just plug in your income and expenses and the spreadsheet will do the rest. Do not forget to add occasional expenses such as gifts, clothing, car repairs, annual car insurance etc. An easy way to handle these expenses is to take the annual amount you spend and divide it by 12. Enter that amount into the appropriate line on the budget form.
Our budget planner will give you a clear picture of where your money is going and if there are places that can be tweaked to help you reach your financial goals.
When you create and stick to a budget, you get a complete picture of how much money you have coming in each month and where it goes. What is surprising to some people is that the problem in most cases is not that they do not have enough income but that they overspend the income they actually have. When you follow a budget, every dollar has a specific assignment helping you to get a clear picture of exactly where your money is going. Now you are able to stop this unnecessary spending and set yourself up for a successful monthly plan.
With a budget in place, your spending can be prioritized to go toward important expenses first. Your obvious expenses are food and shelter. However, we all have expenses that are not necessarily as important as we tend to believe. As you create your monthly budget, you should ask yourself: “How important is this expense to me?” If you discover that it is not as important as you think, then you need to find a way to cut or remove it all together. This way, you are freeing up your money to go toward an expense that is more vital to your life. But do not forget to include those “fun” items in your budget. You will likely be more successful in sticking to your budget if you allow yourself some fun expenditures too.
A budget should not be set in stone. Review and reassess your budget on a monthly basis. If you are constantly overspending in one category and under-spending in another, it is time to look at changing the numbers to more accurately reflect your spending. Getting acclimated to a new budget takes times. Don’t get discouraged. Remember that planning a budget is an important step to maximize your financial wellbeing.
After writing and sticking to your budget, you may oddly find that you have money left over. If that is the case, you may want to put some toward savings, paying down debt or even some toward a vacation or a down payment on a car. Regardless of what you decide with the extra cash, the budget really does keep you on track to meet your goals faster.
The Credit Union staff is always ready, willing and able to help you reach your financial goals. Please call or stop in to see how we can help to reduce your financial stress and get you on a path to have the peace of mind that your money is working for you. What a gift to yourself to be able to see where your money goes and hopefully help you to sleep better at night.
