How to Build a Budget

April 15, 2020

Many of us have attempted to build a budget at one point or another.  The problem with budgets, is that we set them up with the best of intentions, then stick that handy budget in a drawer and never look at it again.  What makes a budget work, is having the willingness and ability to map expected income and expense to actual income and expense and adjust accordingly.  Easier said than done, often.

Let's start with income.  Is your income fixed or variable?  If your income is variable, your spending should fit within your your minimum income after taxes coming into your household.  Overtime and bonuses should be "extra" cash and not amounts required to fund your month to month expenses.

Go through and separate out your must have expenses (housing, insurance, groceries, etc) from the discretionary spending (entertainment, dining out, travel, etc).  With a program that I utilize for my clients, we can link up your bank accounts, credit cards, mortgage, loans, investments and you can see everything with one login and build you a budget that is essentially automated with data from your linked accounts.  We can now track budget to actual with little intervention and help keep your budget on track! 

 

This is meant for educational purposes only.  It should not be considered investment advice, nor does it constitute a recommendation to take a particular course of action. Please consult with a financial professional regarding your personal situation prior to making any financial related decisions.  (04/20)