Creating and Sticking to A Budget

Only 32% of Americans say they have and maintain a household budget. According to aGallup poll, 31% said they have less than $500 in savings and 19% said they have none at all. Almost half (49%) said they are worried about their financial well-being, and with good reason. Credit card and student loan debt are at record highs. Americans hold over a trillion dollars in credit card debt and another trillion in auto loan debt. If you’re one of them, or you feel shame about having little savings or living paycheck to paycheck, don’t. You’re not alone. You’d be surprised to find that more people than not in your communityhave the same worries.

There are things you can do to strengthen your family financial health, and they don’t necessarily involve making large sacrifices. All you need is some discipline and positive thinking.

Creating a Budget

The first thing to do is to pull out all your bills and add them up. Yes, it won't be pleasant, but it's necessary. Then add things like gas, groceries, prescription meds and other regular expenses, and subtract the total figure from your monthly income (you may need to pull out your paystubs for this). What’s left over is your discretionary or disposable income. More on that later.

Next, look at your list of discretionary spending. Can you find a cheaper place to buy gas?Forgo Starbucks a few daysa week? Bring your lunch instead of going out every day? Switch your prescription from the brand name to the generic? These are all little ways to cut spending and save more each month.

Once you’ve listed the little things you can do without or cut back on, take a look at the big things. Can you switch to a cheaper cell phone plan? Cut cable or your landline? These days, people are cutting the cord in growing numbers and saving hundreds by using services like Sling and Netflix instead.

Once you have all these done, and have made decisions on what you can cut/reduce, It’stime to set your budget. Bills will always be a set amount that can’t really be helped, but then it’s up to you how much to set aside for things like eating out, going to the movies, Starbucks and so on. You may find you’d rather putmore toward the moviesand less toward those expensive coffees. Whatever works for your family is fine. The goal is to have as much left over at the end of the month as possible. These funds can be used for whatever you wish, but we recommend putting at least 40% into savings each month and try and use some to increase your credit card payments so you can get those balances down faster.

Sticking to It

Sticking to a budget isn’t easy, especially at first, but as you see your savings balance start to rise, you’ll be more and more motivated to do so. You may find yourself enjoying the challenge of finding the best deals and collecting coupons, both of which can be super motivating. Should you slip at all, don't beat yourself up, just get back on track the next day and start from there. Budgeting is not about depriving yourself or feeling bad; it's about taking control and feeling good about it!

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