Managing a Budget

Managing your income and expenses is an important part of being well. Get control over your financial wellness with these budgeting tips!

  • Think about why are you budgeting-- what's your long term goal? Figure out where you want to be before you try to get there.
  • You'll need some info to start budgetting: income (after taxes), fixed expenses, variable expenses, occasional expenses & savings.
  • Start by figuring out how much money you make. This is the amount you have to work with every month.
  • If your income varies (you're self-employed, part-time, etc), take your annual income & divide by 12. This is your monthly income.
  • Fixed monthly expenses tend to stay the same (or close to the same) every month. They include rent, internet, utilities, etc.
  • Variable expenses change from month to month. They include gas, groceries, daily coffee, meals out and entertainment expenses.
  • Occasional expenses come up from time to time, such as gifts and vacations. You should plan for these: http://bit.ly/1eDElEk
  • Make room in your budget for short-term emergency savings AND longer-term savings to help you reach your financial goals.
  • If your budget doesn't balance you have two options: spend less or earn more. Borrowing should never be a long-term solution.
  • Reduce fixed expenses first, as this will save you money every month. Check out some tips for common ones: http://ex.pn/Vies07
  • Think critically about your variable expenses. Don't spend money you don't need to. Cut back where you can: http://bit.ly/1a9zR3x
  • Thinking about moving out? Make sure you have a realistic idea of what it will cost. This worksheet is great: http://bit.ly/18qsUkl
  • Cheap out on entertainment. Instead of going to a movie, borrow a few flicks and grab microwave popcorn on sale.
  • Can't figure out what you spend? Keep a notebook (or app) with you & record every expense. Other option: keep your receipts.
  • Take a good, hard look at your spending records after a month or two. You'll likely see some obvious cuts you can make.
  • Depending on how much you need to save, you may need to make some hard decisions. Work out your priorities and cut the surplus.
  • Stop using credit cards. It's easier to overspend because you don't see the money come out of your pocket. Go back to spending cash.
  • Let your friends know you are managing your money. You can plan affordable activities together and they can act as referees.
  • Even if you aren't in a place to make more money yet, learn some new skills or meet new people to be ready when opportunity knocks.
  • If you run into unexpected expenses, sell unwanted items or do odd-jobs. If this expense happens monthly, start budgeting for it.
  • Rethink your purchases. Do you really need them? Could you get it at a better price? Buy what you need, not what you want.
  • You can get yourself in a better financial position fairly quickly, but it takes commitment to keep it up. Stay strong!
  • Remind yourself every day that you're going to spend less than you earn. Reward yourself in non-financial ways for success.
  • Don't be resentful of those better off than you. Use them as inspiration & realize that if you keep on the path, you'll get there.
  • Interest costs money. Interest is an expense that you have to pay it on top of an item's cost. Think about it. http://bit.ly/cif9Hq
  • Take charge and read some basic books on finance. Once you're armed with knowledge, you won't be caught off guard again.
  • Suggest alternatives to expensive plans. Show that you want to spend time with others, even if you can't afford costly activities.
  • Emotional spending is when you buy things you don't need because you feel stressed out, bored, unhappy, etc. http://bit.ly/6cFUom
  • A simple budget rule is 50-30-20. 50% of your budget is fixed expenses, 30% should be variable and 20% for savings and debts.
  • If you have high-interest debt, pay it off rather than focus on savings. It doesn't do any good to save money if you're losing it.