Practical Budgeting Tips That Everyone Should Know | SCFCU

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Oh no! - It’s the dreaded B-word again- Budgeting.
Unfortunately, the word budgeting gets a bad reputation and as a result it is never used. Most people see budgeting as a rope or chain that keeps them away from doing the things they like most. In reality, that’s far from the truth. Budgeting actually gives you the PERMISSION to spend in the things you like doing most. Budgeting is all about being intentional with your money, making you a more stress-free individual.

How does budgeting help you?

Budgeting helps you create an action plan to see where each dollar ends up at the end of the month. This will give you an easier path towards reaching the goals your striving for like buying a house or saving for your children’s college.

So you’re probably asking yourself, “Where do I start?”. Good news, you are where you should be! Here are 8 practical tips to help you budget.

1. Start with the ESSENTIAL categories

Whenever you start your budget, ask yourself, "What are the most important things that'll keep me alive?". The answer is: food, utilities, shelter, and transportation.


#SunTip: Don’t mix up your food budget with your “fun/eating out” budget. These two are separate categories. Remember, eating at home will always be cheaper, and overall healthier.

2. Budget to ZERO

Don’t let any one of your dollars not have a purpose. Make sure you know where each dollar is going. Even if you plan on giving yourself a large amount fun money, make sure you know the amount of money you’re give yourself for that category every month.

3. Do the budget together

If you’re married, sit down once a month and have a family budgeting night. Make it fun! Grab some of your favorite snacks and put on a good playlist to help you focus.
It is proven that couples that are on the same page about finances dream together, and reach financial goals faster. If you are single, then consider getting an accountability partner to keep you on track.

4. Remember every month is different

Some months you’ll need to budget for Vehicle Registrations, others for back to school supplies, and others for vacations, birthdays and holidays. Make sure you adjust your budget so none of these special days sneak up on you.

#Suntip: Christmas is in December once again!

5. Make a schedule (and stick to it)

While you’re doing your monthly budget, why not set specific dates for other expenses? Many times a car payment and a mortgage payment don’t have to be due on the same week of the month. Spread these payments out into different weeks or pay weeks to make sure you have some cash on hand to use.
Many times we tend to pay all our largest expenses at the beginning or end of the month. This puts us in a situation where we don’t have any cash to buy groceries with and we end up using our credit cards and racking up more debt.

#Suntip: Remember, credit cards are just tools to help you get out of a pinch. Always make sure to have cash to back up your credit card purchases.

6. Budget according to your household income

Don’t try to budget more than what you make. This means if your household income is $50,000 a year, then you should be budgeting for $4166 each month. Anything more than that will have you racking up debt and could put you on a path towards owing more than what you make.

7.  Always budget for an emergency fund first

What keeps most people from meeting their monthly money goals is unexpected circumstances. By now this is no excuse since you already know that unexpected circumstances WILL HAPPEN. The best way to be ahead of the game is to quickly rack up $1000 as an emergency fund, then throughout the months slowly add more money into that account.

#Suntip: Christmas day or a birthday party aren’t emergencies. These days can be planned out ahead and should be (refer to tip #4).

8. Track your progress

It is important to check back on how far you’ve gotten. Look back at your previous budget and see if your wallet is doing better. Look forward and see if you are on track towards meeting your goals! Never forget to celebrate small wins!

By following these tips, we can guarantee you that you’ll have less financial stress the instant you know you finished up your first month’s budget. So why not start a budget right away?

Do you have any tips on how to budget? Let us know in the comment box down below.
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