Making a budget is difficult. Realistic budgeting is even more difficult.
Everywhere you look, someone has a budget checklist or worksheet to help you get a handle on your finances. Here are a few tools we have available to help you with the process. These are a great place to start, but your budget needs to fit your needs. There’s no “one size fits all” method to creating a budget.
If you’ve already reviewed your spending for the past year, or even past few months, you have a good idea of where your money is going. Now you can ask yourself, “Is this how I want to spend my money or do I have other priorities?”
If you’re fine with how you spent money in the past, then budgeting is easier. Create a spreadsheet of your monthly income and expenses so you track any changes in your spending and hold yourself accountable. Don’t forget to plan for annual expenses and put money in savings and retirement accounts.
Changing your spending habits takes more work. Start by listing any expenses that surprised you when you reviewed your finances. Did you spend more than you anticipated in any particular category? Now consider your lifestyle and priorities. Do your lifestyle and priorities allow you to cut spending in a particular category? Deciding what is important to you is a good start to trim up your budget.
Check back with us next Tuesday. We’ll have a new Centra Blog post each week.