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14 Household Budgeting Tips


Putting together a realistic and helpful budget can be harder than it looks. These are the top 14 tips that many Certified Financial Planner™ professionals share with their clients.*

  1. Don’t call it a “budget.” Use descriptions such as a “savings and spending plan” or “cash-flow management.” The term “budget” can feel constricting, while a “savings and spending plan” focuses on being in control and making informed choices.
  2. Budgeting is for everyone. Planners report putting affluent clients on spending plans because they, too, frequently struggle to save and control spending.
  3. Spend less than you earn. Building wealth and financial security is based on a simple premise: spending less than you earn. The role of a spending plan is to help you see where your money is coming from and where it’s going. Get a picture of your finances by using BALANCE Financial Fitness from SLFCU.
  4. Develop a financial plan. Establish a spending plan that supports your family’s goals and values. If your goal is to save $500 a month but you have only $200 in surplus cash flow, you’ll have to either adjust your goal or your spending. Use our budgeting tips to develop a plan.
  5. Pick a method that fits. Some people work best with a detailed spending plan that tracks every penny. Others do better with a “top-down” approach – they first set aside funds for their savings goals and major expenditures such as a home, insurance, and groceries, and let the little stuff fall where it may.
  6. Pay priorities first. Regardless of what approach you take to budgeting, a key is to be sure priorities are paid first. That reduces the potential for frivolous spending.
  7. Track spending. Even if you prefer the “top down” approach to budgeting, it can be helpful to track spending closely for several months to get a feel for where your money is going. Many households don’t truly understand where their expenses are greatest. Tracking spending can help identify funds you can afford to move to the top for additional savings.
  8. Track the cash. Don’t just track cash under a “miscellaneous” or “allowance” category. If you track your cash expenditures you’ll probably be surprised how much of that money could be better used elsewhere.
  9. Practice with short-term goals. Sometimes budgeting for a short-term modest goal is good practice and can help motivate you to work toward more expensive long-term goals. It’s like losing a pound a week on a diet – signs of progress motivate you to continue.
  10. Spend from sub-accounts. It can be useful to establish savings sub-accounts such as a vacation account, a car account, an education account, and a retirement account. With a single large account, it’s easier to lose track of money.
  11. Automate. If possible, have your fixed expenses, such as mortgage and car loans, paid automatically so you never miss an important payment. Online Banking and automatic bill payments are a great way to do this.
  12. Cheat. It’s OK to occasionally “cheat” by overspending in a category without ruining your budget or feeling like a failure. (But “occasionally” doesn’t mean weekly or even monthly!)
  13. Look for signs. There’s a simple way to gauge whether your plan is working – are you increasing savings and decreasing debt? Or are you dipping into savings and investment accounts to meet cash-flow needs?
  14. Check in now and then. Like all aspects of your financial life, you need to check in with your spending plan now and then to see if it’s still accomplishing what you need for your circumstances. Perhaps you’ve experienced major changes in your life that require refining or revamping your spending plan.

*This article was provided by the Financial Planning Association, the membership organization for the financial planning community. FPA members are dedicated to supporting the financial planning process in order to help people achieve their goals and dreams. This article does not imply an endorsement or recommendation of Sandia Laboratory Federal Credit Union.

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