Money isn’t everything, but it is a big part of our lives. Almost everything we do involves money, so it’s important to be financially responsible and make wise decisions. Setting a budget for short-term and long-term goals is a great way to stay organized and on top of things.
Setting a Budget
Establishing a budget and sticking to it isn’t easy, but it is the best way to be in control of your finances and make sure your money is going toward the expenses that matter the most to you.
Make a list of your values - Write down what matters to you. Then, put your values in order.
Set your goals - Write your goals down. What do you want to accomplish financially in the next three months, the next year, and the next three years?
Determine your income - Figure out your available income (the amount of money you take home). Avoid including on overtime pay because it isn’t a reliable source of a regular income.
Determine your expenses - In the era of keeping receipts, this is when they are most important. Review your receipts, credit card statements, and more to determine where your money is really going. Fixed Expenses such as rent, auto, or loan payments are easy to determine. Flexible Expenses such as food, clothing, and entertainment vary from month to month.
Create your budget - Think of your budget as a “spending plan,” a way to be aware of how much money you have, where it needs to go, and how much, if any, is left over. Your budget should meet your “needs” first, then the “wants” that you can afford. Your expenses should be less than or equal to your total income. If your income is not enough to cover your expenses, adjust your budget by deciding which expenses can be reduced.
Pay yourself first - Saving is a very important part of protecting yourself financially. Save as much as you can each month. Even small amounts can make a big difference if you keep it up.
Plan for emergencies - A great goal to establish is an emergency savings fund large enough to cover three to six months of your living expenses.
Credit - Be careful with credit cards. Do research to find a credit card that fits your needs, but be aware of interest rates and additional fees.
Check Yo-self Before You Wreck Yo-self - Be sure to review your budget regularly to make sure the plan still meets your needs and helps you achieve your goals. If your plan isn’t working, adjust it until it does.
- Annual Credit Report
- Consumer Financial Protection Bureau
- Mint - budgeting tool that helps you create and stick to budgets. It is also available as a mobile app.
- National Foundation for Credit Counseling
- Textbook Buying Tips - 11 ways to beat the system when buying college textbooks (an article from Today)
- Maping Your Future