Budgeting Tips Tips to help you start or revisit your budget.

Knowing how to budget is a critical step of your journey to financial wellbeing. A budget can help you understand where your money is going and direct it where you want. Here are tips to help you start or revisit your budget.

1. Find Your Why

What is your end goal? Are you looking to save for something special, like a trip, a wedding, a down payment on a house, or starting a business? Are you looking to get yourself out of debt? Or are you looking to understand or change your habits. Finding you why is the first step because it gives you something to work toward and helps you set the right path.

2. Try Different Budgeting Methods

There are many ways to budget. To find the one that works best for you, you may have to try a few methods and tools.

• 50-20-30: This is the process of dividing your income into three categories, spending 50% on needs, 30% on wants and 20% on saving.
• The envelope system: is the process that allows you to physically portion out your monthly income into different spending categories. Take a few envelopes, write a specific expense category on each one — like groceries, rent or utilities — and then put the money you plan to spend on those things into the envelopes.
• Daily expense tracking: If you make money, track it. If you spend money track it. Getting into a daily rhythm is crucial if you go this route.
• Budgeting apps

3. Include a Balance of Expenses, Goals, and Wants

A budget is a plan not a punishment. It’s a way to understand and direct where your money goes. Your budget should account for your essential needs, long-term goals, and wants. To be successful, try to find the right balance of all three. Remember, everyone is different. Your priorities and current wants may not be the same as others.

• Essentials: groceries, rent, utilities, transportation
• Goals: paying off debt, saving for a specific purpose
• Wants: entertainment, non-essential products and services, purchases for an immediate need

4. Leave Room for Surprises

Not everything will go according to plan. It is important to factor in surprise expenses and emergencies. Having savings to help cover car repairs, home repairs, medical bills, and other surprises will help you stay on track.

5. Revisit your Budget Often

Set aside time to check in with your budget at least once a month. This gives you the opportunity to see what’s working, what needs work, and to make changes.