Building a Budget in 10 Easy Steps

10. Start Fresh

If you have a budget and it isn’t working, scrap it. If you don’t have a budget but you have some pre-conceived notions of what a budget is, scrap it. Budgets are for the overbearing and uptight right? Wrong. Budgets are so you can meet your savings goals, and if that means some or all of those savings are spent on shoes, then you can do that … without sending the rest of your finances into flames and stressing out each month.

Start with the basics. How much do you spend on bills? How much are/would you like to invest? How much would you like to save and spend? Once you’ve divided up your money into those basic categories, you have a pretty good foundation to build a more specific budget.

9. Account for Every Dollar

Your mom told you that every penny counts. And like most things, she’s right. Account for every dollar you make. This might be where budgets get their uptight notoriety, but all it means is that you should “spend” all your money in your budget each month.

Spending doesn’t necessarily mean in the consumer sense. It might mean you could spend that dollar on saving or putting toward a 401(k).

8. Focus on What Really Matters

When making your budget, think beyond the basics of rent, food and utilities. As you think of Maslow’s Hierarchy of Needs and your budget, remember that your physiological needs (such as food, clothing and shelter) are most important, followed by safety (insurance, utilities), and so on. The luxuries as the top being the least important. Remember: With a balanced budget, freedom will come from doing what you want to do in your life, not exuberant wealth.

7. Rank Your Debt

If over the years you’ve accumulated some debt, and most people have, take an extra-long look at it. Prioritize your debt and use the debt-reducing tactics that fit your situation to get out of debt faster.

6. Track Your Spending

Knowing where every dollar goes is paramount to successful budgeting. Travis Credit Union is here to make this part easy. MyInsight is a great resource and makes budgeting almost fun. If you haven’t used it yet, sign in to your online banking. Every member has this free digital money management tool at their disposal when they use Online Banking.

5. Find Tracking Techniques that Work for You

Of course people have different ways of saving and handling their finances. This is no different. If you find something isn’t working for you, try something else. Travis offers online banking on your PC and Mobile Banking for your phone so you can see exactly where your money is day or night.

Sometimes a spreadsheet is all that’s needed or maybe you want to go a little more physical. Using separate accounts often helps some people see exactly how much they can spend.

4. Give Yourself Some Spending Space

Life is unpredictable and is arguably what makes it so great. If you budget too meticulously, it will induce stress and the budget will ultimately fail. Stash enough money away for those expensive unexpected moments but also budget some money for fun.

Prone to splurging? Create a budget for it to avoid overspending. Or allow the use of money after other goals are accomplished. However you do it, just make sure not to neglect the fun!

3. Know What Makes You Weak

Maybe it’s $400 shoes, your morning latte or eating out. We all have weaknesses and as you build your budget, give special attention to the areas you know you’re weak. Recognizing your weaknesses and strengthening your mental fortitude for these spending behaviors will help keep them in check.

2. Nothing Is Set In Stone

Your first budget might not be worthy of a David-like statue. That’s okay! Life is ever changing and your budget should too. If something doesn’t work, change it. The great thing about owning a budget is you can change it when you need to and the old adage is true, practice makes it better.

1. Stay Strong and Stick with It.

Budgeting isn’t the most glamorous, we get that. However, by becoming a budget guru, you can seriously change your daily decisions and you’re overall financial health.

Keep with it. This is the most difficult part of budgeting. Keep track of your budget each and every month, wait 48 hours before making any big purchase, and perhaps most importantly, accept that every once in a while, you will trip up and that’s okay.

Now get out there and start building a budget and see how a little money management can do for you!

MyInsight