Budget Checkup: 5 Tips To Fine-Tune Your Finances
When planning your budget, separate the “wants” from the “needs.”
(NAPSI)—With a new year in full swing, self-evaluation is likely a common theme in many U.S. households. In this frame of mind, many families are likely to assess spending and saving habits, crafting a plan for better budgeting.
When was the last time you took a serious look at your budget? If you’re due for a checkup, a number of tools and tips exist to help guide you through the budgeting process. You can find resources online, like budget worksheets that allow you to plug in your income and expenses and determine where there is room for adjustment. These are available for free to those who take the AllyWalletWise.com budget course.
The following five tips can help you create a budget that works for you:
• Envision the finish line: It’s hard to start a race without knowing where and when you will end. Decide on a financial goal—a big purchase you want to make, a debt you’d like to pay off or a savings fund goal—and use this as a motivational tool to commit to a budget.
• Put pen to paper: To best understand your current financial landscape, begin with a big-picture view. List household income, expenses and savings goals in an organized document (whether written or online). Don’t try to budget in your head.
• Balance your budget: Are you keeping expenses proportionate? Typically, housing costs should not account for more than one-third of your monthly take-home pay, while transportation costs should account for less than 20 percent, and savings between 5 percent and 10 percent.
• Dig up deals: You can easily “find” more money in your budget by cutting down on current expenses. First, identify which parts of your budget are considered wants—versus needs—and whether you’re willing to cut them out. Then look online for discounts and to review various service providers, like cell phone and cable, to see if any better deals are available.
• Aim for weekly check-ins: Decide who should be involved in the budgeting process and meet on a weekly basis to review finances, which will help you stay on track and remain accountable. Don’t wait until the end of the month, when making fixes will be harder. And remember, a sound budget requires regular review, since financial situations can change and unexpected events can occur.
Learn More: For information on basic budgeting guidelines or to take a free online budgeting course, visit Ally Bank’s financial education website, Wallet Wise, at www.AllyWalletWise.com.