A Simple Guide to Help You Get On the Right Track

A simple way to save money and have a smart financial plan is to learn how to budget. Review our guide below about budgeting basics to get on the right track with your finances.

Set a Goal

The first step toward developing successful budgeting habits is to set a goal. Set some time aside to consider why you want to budget in the first place. Setting a budget will help you reduce overspending or impulse spending, get out of debt or save enough money to achieve long-term goals, such as buying a house or a car. Whatever the reason may be, ask yourself why you want to budget to help place you on the right track.

Track Spending Habits and Calculate Income

Review your previous month’s expenses to pinpoint your spending habits and identify where there’s room for improvement. Account for every dollar and organize expenses into spending categories. Certain credit and debit cards automatically categorize your purchases into dining, entertainment, groceries and gas. Another option is to create an Excel spreadsheet for a visual aid. These methods allow you to see which categories you’re spending the most money on, which in turn will make the process of reducing overspending a lot easier.
Calculate your income to determine what you’re actually able to spend each month. PFCU offers a variety of free financial calculators to help you calculate your monthly income based on your current financial situation.

Enable the Auto Payment Feature

Paying your bills on time also contributes to successful budgeting. Enabling the auto payment feature for your credit union or bank will not only prevent you from impulse buying or overspending on unnecessary items but it will also save you from possibly forgetting the due date since money is automatically taken out.

Revise your Budget Plan

It’s just as important to revisit your initial budget plan and adjust accordingly. Your income, expenses and priorities can change, so make sure that you update your budget plan often. Review resources from your credit union or bank to help make the process easier.

Learning how to budget ensures that you’re spending only what you need and allows you to have additional money left over to put toward larger purchases. Above all, it’s best to always have some sort of plan for your finances.

 
Erin Ellis
Accredited Financial Counselor ®
Philadelphia Federal Credit Union
eellis@PFCU.COM