Budgeting is the ultimate hack to reach your financial goals faster. Creating a realistic budget can set you up for success and help you help manage your money more effectively going forward. If you’re not sure on where to start, Picatinny Federal Credit Union has got you covered with budget tips and tricks!

Budgeting Tips:

• Assess financial situation
• Set financial goals
• Create a budget
• Track expenses
• Cut unnecessary expenses
• Stay motivated
• Review and adjust

Assess your financial situation:

The best way to start a budget is by assessing your financial situation. Take some time to gather all that encompasses your financial makeup. This includes income sources, expenses, debts, savings and investments, and financial documents. It may be a lot of information, but once you have this organized and laid out in front of you, you’ll be able to see your financial makeup clearly. 

Set financial goals:

Now that you’ve assessed your financial situation, it’s time to set some financial goals. A budget should include short-term and long-term goals. Why is it important to set goals? Having specific goals will give you direction and motivation to achieve financial stability. These goals can start off small. For example, if you’re saving up for a vacation with your friends, this would be classified as a short-term goal. If you’re saving up to buy a house for you and your family, you would put this under your long-term goals. Putting this list together will encourage you to save, while also teaching you better financial management.

Create a budget:

A budget method that we recommend is the 50/30/20 rule. This is where you allocate 50% of your income to needs, 30% to wants, and 20% to savings and debt repayment. By using this method, you’ll be able to have a clear understanding of how to organize your needs, wants, and savings. It will also allow you to live a balanced life. 

Track expenses:

Tracking your expenses is what will keep you on track to reach your financial goals. Monitoring your spending and tracking your day to day transactions will help you realize what improvements you can make moving forward. If you see a monthly subscription charge to something that you no longer use, cancel that subscription and knock off that expense. Consider finding a convenient way to track your expenses. There are tools out there that can be used to help with this. Picatinny Federal Credit Union’s online and mobile banking platform allows our members to easily and conveniently track their expenses. We take the guess-work out of budgeting with real-time updates and color-coded trends which make it easy to see where you’re spending, from the grocery store to the gas station. You can also view month-over-month graphs to see how much you spend on household needs, traveling, and personal care. Having these tools gives our members a boost to reach their financial goals faster. We also recommend that you take advantage of our budgeting calculator that we have on our website. Reducing your spending can be worth more than you might think. Use this calculator to see just how much your budget reductions may be worth, if you were to invest them. 

Stay motivated:

Budgeting can be a daunting task. It’s crucial to stay motivated and hold yourself accountable. You are the key to making your financial dreams come to life. When there’s an opportunity to reward yourself, do it! Grab that seasonal coffee on your way to work and remind yourself that budgeting is a good thing. You are taking the necessary steps to provide yourself financial success, and that deserves to be recognized. If you’re struggling with accountability, let your friends and family in on your budgeting strategy. They can also help hold you accountable, and maybe in turn, you can hold them accountable to reach their goals.

Review and adjust:

Lastly, remember to adjust things as you go. A budget isn’t set in stone, it’s supposed to be ever changing and flexible. You will add on new vacation plans, cancel an unused membership, and find a new hobby along the way. The good thing is, you now know how to create and manage a budget!

You are already one step closer to achieving financial success with some of our budgeting strategies. Now that you are equipped with the knowledge of what should be prioritized when creating a budget, we are confident that you will thrive financially and reach your goals with ease. If you find yourself in need of personalized, expert guidance, be sure to visit your neighbors at Picatinny Federal Credit Union and we can help you navigate financial needs through all life stages. Visit www.picacreditunion.com.

Happy budgeting from your friends at Picatinny FCU!