Step #1: Tracking Your Spending
Certainly, you know the expression, “What you see is what you get.” But, where your finances are concerned, what you see is what you budget. This means that you have to begin with a clear and full picture of exactly where your income is going each month.
As you capture your spending patterns, look for ways to categorize expenses. For instance, below are five common buckets to get you thinking:
- Housing and utilities (think rent or mortgage, electricity, gas, HOA, water)
- Food and dining (include groceries, eating out, coffee shops, lunch at work)
- Auto and parking (add in gas, oil changes, parking fees, auto insurance, car washes)
- Credit and loans (note credit cards, lines of credit, student loans, store cards)
- Clothing and entertainment (record clothing, shoes, movies, shows, events)
The list above is by no means exhaustive. That’s why it’s crucial to look for a tool to help you track your dollars and cents. Sure you could use a spreadsheet or an app...
Better Budgeting Tip
Instead, simply access MoneyDesktop, a free budget tool that is integrated into Deer Valley Credit Union online banking. It empowers you to control finances and simplify your life. Mobile budget access, account aggregation and categorization are just a few of the tools to guide you.
Don’t just track spending, own it with insights that reveal where, when and how you spend!
Step #2: Proactively Plan Ahead
If you want to truly own your budget and score some well-deserved breathing room in your checkbook, the next step is to plan ahead.
Sit down and outline the out-of-the ordinary or cyclical expenses you can anticipate in the month ahead. In case you need a few thought starters, here are helpful questions to ask yourself:
- Will my income change in any way (e.g., bonus, unpaid work days, new deduction)?
- Are any new bills kicking in (e.g., student loans, credit card grace period ending)?
- Did I overdraft or overspend this month (e.g., unexpected charge, emergency)?
- Have any existing bills increased (e.g., childcare, insurance, utilities)?
- Do I anticipate any quarterly bills being due (e.g., HOA, memberships)?
It’s a good idea to scan your bank statement or online banking account summary for the last 30-60 days to ensure you have thought of everything. Then, build in a buffer—how much is up to you—for the unexpected, a fun evening with friends or that pick-me-up latte that helps you face Monday like a boss.
This article is intended to be a general resource only and is not intended to be nor does it constitute legal advice. Any recommendations are based on opinion only.