New Budget for the New Year
Get a Fresh Start on Your Household Finances

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Many women take the lead in household money matters, and now is the perfect time to get your budget in order. Whether you’re saving for a large purchase, paying off debt or just trying to make ends meet, home budgeting is critical to achieving your financial goals. Following are practical tips that could help you take control of your finances.

Assess your financial situation

Review your income, expenses, debt and savings to get a clear understanding of your finances. Eaen O’Byrne, a certified credit union financial counselor and solutions specialist at Altra Federal Credit Union, poses a few questions to help determine if you’re budgeting enough to pay your bills, while also having spending money and saving for a rainy day:
• Do you typically have less than $50 in your checking account before your next paycheck, with a low to small savings account balance?
• Do you need to get a personal loan or use credit cards or other loans to pay your basic bills?
• Are you using your credit card more than your debit card, but then only paying the minimum due?
No matter what your situation is, a home budget can lead to financial stability.

Set short-term and long-term financial goals

It’s important to save for goals you hope to achieve over the coming months, years and decades. Short-term goals may include paying off your credit cards or buying a new car, while long-term financial goals could be paying off your mortgage or saving for your children’s college expenses—and your retirement. “This all starts with creating a simple budget and figuring out how much you can start saving now,” explains O’Byrne.

Create a realistic home budget

Your financial spending plan should outline how your income will cover your expenses and how a portion can be saved to reach your goals: 1) Make a list of all fixed expenses to be paid first, such as mortgage and car payments; 2) List variable payments that must be made, including credit card and utility bills; 3) Add monthly expenses that are part of your spending pattern, such as groceries, gas and fast food; and 4) Identify where you can cut expenses. For instance, can you reduce expenses for fast food and, instead, spend a little more on groceries? “Add in spending money for things you want to buy or want to do,” says Byrne. “Your budget should show a zero balance at the bottom, as any extra money that’s not in your budget should go into savings.”

Stick to your (family) plan

Track your spending regularly and follow your plan. “If you want to become more financially stable and are really dedicated to your budget, you will make it work,” says O’Byrne, who suggests reviewing and adjusting your home budget monthly to ensure the information is as accurate as possible. “Once you get the budget process down, you can reduce the frequency of reviewing it to every couple of months and then to every year,” he adds. “If you have a family, all members need to be involved; otherwise it is not going to work.”

Prioritize savings

Growing your savings should be a non-negotiable part of your budget. Even if you can only set aside a small amount each month, consistent savings will help you work toward your long-term goals and build an emergency fund. If your car breaks down, can you afford repairs? If you lose your job, how long can you pay your bills? For unexpected costs and short-term emergencies like these, your savings should have the ability to cover three to six months of living expenses. 

Seek professional assistance and online tools

Consult a financial professional who can offer personalized guidance to create a budget and make the most of available resources. Be sure to ask about the feasibility and features of budgeting apps for your specific needs, such as:
• Mint: allows users track their expenses, create budgets and set financial goals
• Prism: assists users in tracking and paying bills, managing due dates and avoiding late fees
• YNAB (You Need A Budget): emphasizes a proactive budgeting approach and offers tools to help users manage their money effectively
• Money Canvas via Thrivent: offers free coaching to track spending and build financial habits

Now is the time to create a home budget to achieve your financial goals. Successful budgeting is an ongoing process that will advance with discipline and adapt as your financial situation evolves. :: 

:: get connected 

Get free information, tips and templates on home
Altra Federal Credit Union: “What is a Budget?”
Home Federal: “Starting a Monthly Budget.”
Mayo Employees Federal Credit Union: “Budgeting”
MBT Bank: “Home Budget Calculator”
Sterling State Bank: “Savings Goal Calculator”
Think Bank: “Preparing Your First Budget”

Check out our Financial Worksheet HERE to get started tracking

 

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Trish is a Rochester-area freelance writer who is inspired by and honored to share the stories of courageous, strong and amazing women in and around the Rochester community.

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