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Money Monday: Budgeting 101

Money Monday: Budgeting 101

Keeping track of your finances can be a pain! It can mean staying in on the weekend when your favorite band is playing or missing a night out with your best friends. We have all been there, and lets be honest, it stinks! On the other hand, reaching a large financial goal and developing financial independence with a well-developed budgeting plan can be pretty satisfying.

What is budgeting?
Budgeting means knowing where your money is coming from, where it goes and then planning on how to balance those funds. A budget is a great tool that will help you make the most of your money; it will help you redirect your cash to where you really want it to go.

Here are some financial tips and tricks to help you manage your money efficiently:

1. Set financial goals Are you looking to buy a new car or pay off your student loans? You may just want to save a little cash every month to spend on new clothes or that must have item. Set realistic financial goals for yourself! Goals are an important aspect of budgeting because they give you something to work towards and help you stick to your plan.

  • Make your goal specific
  • Make your goal measurable
  • Make your goal realistic and reasonable

2.  Create a savings fund You never know when an emergency may come about and you need to spend more money then you planned. Having a savings fund will help you in those unexpected situations. Take a small amount of money from each pay check you receive and store it in an emergency fund. This can add up quickly and will help you prepare in times of need.

3.  Track your money

  • Record your expenses
  • Save your receipts
  • Use online banking to keep track of your transactions
  • Use cash to keep spending under control
    • Swiping plastic has become incredibly easy but risky at the same time. By using your debit and credit card you can lose track of how much money is actually being spent. 3 dollars here, 4 dollars there; it can add up and become hard to track how much you have spent. One trick to help keep your daily spending under control is to use cash instead of your credit or debit cards. This helps to visualize how much money you are actually spending.

4. Create a monthly financial chart

  • Start with recording your income. This will help you see what you can afford to spend and save each month.
  • Next record your expenses. Make two columns, one for essentials (rent, bills, and food) and the other for extras (those things you dont really need but make life fun.)
  • Total your expenses and subtract them from your income to find out where you stand. This will give you an idea where some of the savings leaks are happening. If you are spending more money than you make, try to identify the expenses you can cut back on.

Sticking to a budget plan based on your income is not always easy. It is common to get side tracked and do some impulse shopping. Focus on why you are budgeting in the first place. Things will happen and you will spend more than you allow yourself. Its not the end of the world! Try to get back on track the next month to reach your financial goals.

For more helpful information and tools on budgeting, check out https://www.mint.com/. It is the perfect way to budget your finances! They have an application for your smart phone where you can track your progress online or stay up-to-date with monthly emails. It will assist you with reaching your goals faster by giving helpful free advice and providing steps for what to do next!

Posted on May 13, 2013, in Budgeting and tagged Budget, Finance, Money

Any information contained within the contents of this blog are opinions and suggestions of the writers and do not necessarily reflect any policies or positions of the credit union. Any reference made to products or promotions are not guaranteed at any time. This information is not intended to be considered financial advice. It is provided for your education only. Community 1st Credit Union is Federally Insured by the NCUA.