Budgeting doesn’t have to mean cutting out all the fun things from your life. On the contrary, it means understanding how much money is going in vs. going out so that you can account and save for all the exciting things you want to do. If you’re looking to get your financial goals in order a budget is a must!
Create A Household Budget
Unless you live alone it’s important to have a household budget that everyone in the home is aware of. Plan a budgeting meeting once a month to go over upcoming expenses. This will help you have a clearer picture of your financial health and keep you on track with any goals you may have! United Financial has partnered with Banzai to help create a budget that fits your lifestyle.
Determine Your Fixed vs. Variable Costs
For certain things like mortgage payments or insurance, your cost each month is fixed and doesn’t change which makes budgeting for those line items much easier. Then there are variable costs such as groceries or utility bills. It’s best to base your budget for variable costs around what you’ve spent on them in the past, and to leave some wiggle room. Reviewing your budget on a monthly basis will allow you to see if you’re consistently overspending.
Don’t Budget Using Your Gross Income
It’s important to take into account what your actual take home pay is after taxes and any deductions such as healthcare. Check out your pay stub or bank deposit to get a more accurate depiction of what you can afford.
Set Realistic Goals
Be realistic about your finances and really understand how much money you’re bringing in vs. paying out. You won’t be able to budget successfully if you’re unrealistic in your expectations of what you can save or spend!
Start an Emergency Fund
If your budget allows for it, an emergency fund is a great idea. While the general rule of thumb is to save up to 3 months worth of your salary, any savings is better than no savings at all. Write down all the things that you will allow yourself to use your emergency fund for such as: car repairs, medical emergencies, unexpected vet bills, or unemployment.
Reduce Your Expenses
If while building out your budget you notice that your expenses are higher than you’d like there are a few things you can do. Consider cancelling your cable or other subscription services that you may not be regularly using. Take a break from eating out, or budget in the occasional splurge meal so that you can earmark money for it. Shop around for price breaks on cellphone or insurance plans.
Need More Help With Your Finances?
United Financial Credit Union has teamed up with Banzai in order to bring you Banzai Direct, the financial literacy program used by millions of teachers and students around the country, to you and your home, for FREE. Experience real-world financial literacy in a fun, safe way.