PHOENIX - If your New Year’s resolution to be better with your money in 2017 hasn’t yet taken hold, you’re not alone. A lot of us wish to do better but often just aren’t sure what the steps are to get there. Below, Desert Schools Federal Credit Union has offered up the basics on creating a budget to make you savings savvy in no time.
* Gather all of your documents
This means anything from your paycheck stubs and monthly bills to credit card statements and more. This will help create a monthly average of income and spending in the next steps.
* Analyze your income
Make sure to write down and track any and all sources of money coming in.
* Analyze your expenses
Write down your monthly bills and any other expenses you expect to incur over the course of a month. These include groceries, gas, insurance, recurring health expenses like prescriptions, pet costs and more.
* Divide your expenses into two categories
Fixed expenses - these are bills that stay about the same each month and are required parts of your lifestyle. Great examples are rent/mortgage, car payment, gas, credit card payment, etc.
Variable expenses - these may vary slightly from month-to-month and include things like groceries and entertainment.
* Total your monthly income and expenses
If your income exceeds your expenses then you’re on the right track. This means you can prioritize any leftover income for paying down credit card debt, or putting some money away for a rainy day.
If you are showing higher expenses than income then you'll need to make some changes to your living habits and consider adjustments. Simple things like lowering your cell phone bill or eliminating cable services can make a big difference.
* Review your budget monthly
This is perhaps the most critical step in the process and can make or break whether you stay on track. After the first month and for at least a few months after, take the time to compare your goals with what you’re actually continuing to spend. This will help you to make adjustments accordingly.
With some discipline and follow through, the above steps can assist anyone in developing a budget and reaching their basic financial goals.