How to Start Budgeting in 5 Simple Steps
Do you ever feel like your money is slipping away without your control? If so, you're not alone. Many of us struggle to navigate our finances, often feeling lost and overwhelmed.
At Advantage Credit Union, we believe that everyone deserves a strong financial future. That's why we're dedicated to empowering our members with the tools and resources they need to achieve their financial goals. Budgeting is one of the most essential tools in your financial toolbox.
In its simplest form, budgeting is the process of planning your income and expenses. It's about taking control of your finances and ensuring your money works for you, instead of the other way around.
Here are five steps to get started with budgeting so you can build a strong financial future:
Track all your income and expenses for a month. You might be surprised to see where your money is going if you track your monthly expenses. You may estimate that you spend $200 a month on groceries, for example, but find that you actually spend far more. The best way to take charge of your finances is to understand your spending habits.
List your non-variable and variable income and expenses. Non-variable income and expenses do not change month-to-month and include things like regular paychecks, rent or mortgage payments, insurance, or recurring charges like subscriptions. Variable income and expenses change month-to-month and include things like bonuses, groceries, gas, and utilities.
Set realistic and achievable financial goals. Once you have an understanding of your monthly income and expenses, you can set goals for your finances. Whether you want to save to buy a house or pay down your debt, setting realistic expectations will help you reach your goals.
Find a budgeting system that works for you. There are many different ways to track your monthly budget, such as the envelope system, the 50/30/20 system, or the zero-based budget. Budgets systems can be tracked with pen and paper, a simple spreadsheet, or even an app. Whichever system you choose, make sure it works for your goals and lifestyle.
Set check-in points to make sure you stay on track. Set time aside every few months to assess your budget. Make sure the system you chose is still working well for you and that you are making progress on your goals.
Creating a stable budget is a great way to gain control over your finances. With these five simple steps, you can build a budget that works for you. Need some extra help creating your budget? Advantage Credit Union has financial coaches that can help you get your finances on track! Call (641) 792-5660 or use this link to schedule an appointment.