Take Control of your Financial Future

A budget is more than just tracking expenses – it is a tool to boost financial confidence. Before you get started on a budget, you must break down the fundamentals of budgeting and identify a system that works for your unique situation. Whether you prefer a digital tool or a more traditional method, like spreadsheets or envelopes, it may take some experimenting before finding the best system to help you stay on top of your spending. 

To get started on a budget you must first identify and understand your income sources. Your income is the biggest item in your budget, so it is important to have knowledge about the details: How much are you paid? How often are you paid? Do you get bonuses or reimbursements? What is being deducted from your pay through payroll? How much is going toward taxes?  

Next, you must understand your regular expenses, which are usually the next biggest items on your budget: savings, housing (including utilities), food, transportation, and debt payments. These are not only the next biggest items in your budget but should also be relatively consistent, so they are sometimes referred to as fixed expenses. It is important to remember that some fixed expenses happen infrequently. For example, registration taxes and repairs for your car, medical expenses, and vacations are not monthly expenses, but they must still be included in your budget.

Everyone spends their money differently, so the rest of your budget is likely unique to you. You should recognize and learn your financial habits to identify areas for improvement. It can often take 3-6 months of tracking expenses closely and adjusting your budget to make optimizations.

 A successful budget also includes debt paydown plans, for student loans, credit card balances, and auto loans, as well as managing your credit. Taking control of your personal finances can feel daunting, especially when balancing student loans, credit scores, and everyday expenses. However, developing smart financial habits can set the foundation for long-term success.

 Join us for our Budgets & Brews workshop on March 5th from 6-7:30 p.m. at Field Brewing Co. in Westfield. We will be going through different methods of budgeting as well as discussing tips for successfully taking control of your budget, debt, and managing credit. We look forward to seeing you there!

- Kyle McCune, CFP®, Worley Erhart-Graves Financial Advisors