Predict the Future with Budgeting

A good budget tells how much you can afford to spend, how much you can save, and when you can make investments for the future. Sounds nice! Too many people give up on budgeting because they are stumped. How can you possibly predict what will happen in the future? Well, you can’t know for sure, but you can make a really useful budget that will give you a good place to start.

Here’s the magic formula:
Knowledge of the Past + Knowledge of the Present = Assumptions about the Future

Budgeting can feel like an overwhelming task, but it doesn’t have to be. Here are some helpful tips to get you started.

Get Back to the Basics

Start by tackling your day-to-day expenses including the small, routine costs that add up fast. Begin with your groceries: create a list before you shop and commit to sticking to it. I also use my list as a tool to keep my healthy eating goals on track.

Before you head to the store, check your grocery app or rewards programs for digital coupons to squeeze in extra savings.

Once you have a clear picture of your everyday spending, break it into budget line items — like groceries, dining out, transportation, or personal care. Your categories can be as detailed or as simple as you prefer, but make sure every expense lands somewhere in the budget.

Here’s an example of how I categorize some of my expenses and what falls into them:

• Groceries consist of any food purchase I make from the grocery store, Target, Aldi, etc.
• Take-out includes any food expense that’s not in my Groceries category. This includes coffee runs, quick snacks from the gas station, ice cream with friends, and date nights.
• Daily Living includes essential purchases I make throughout the month that are related to my everyday life but don’t clearly fit into another category. This includes laundry detergent, aluminum foil, cooking spray, paper products, etc.

Revisit Your Household Budget

It might have been a while since you’ve done this, so now is the perfect time to revisit and re-evaluate your household budget. Take a look at what bills you currently have and see if there is any room for you to save money as every dollar saved counts.

Here’s an example of how I break down these categories:

• Mortgage
• HOA fees
• Internet
• Utilities
• Auto loan
• Insurance

I utilize the “ask nicely” approach. I called my cable/phone/internet provider and “asked nicely” if there were any promotions going on that could save me some money.  Another approach my husband and I took was considering refinancing our auto loans. Auto loan refinancing can potentially lower your interest rate and monthly payment which means more money in your pocket every month.

Use Technology to Help

It’s so easy for us to carry our phones around all day with us but never use them to their full potential. Take advantage of your Alltru App to track all your spending, which will help you stay on budget. Reviewing your statements online helps you see what comes out each month and will help you plan better for the next month. On top of utilizing both of these tools, I also downloaded an easy budgeting app on my phone to make sure I always have my budget and lists with me. I use RocketMoney but you can try others to see what you like the best. With all of these tools right at our fingertips, there is really no excuse not to stay on track.

Make It a Team Effort

To stick to your budget and save money, you need everyone on board. Letting family and friends know that you’re trying to stick to a budget can help them help you. They can hold you accountable to your identified goals and make suggestions for more cost-effective options of having fun when you get together.

One way to do this is to give each member of the family a “fun money” section in the budget. This money is to be used by the appropriate family member as they see fit. As long as everyone sticks to their allowance, all extra purchases will have a place in your budget and won’t make or break your financial situation.

Remember It’s OK to Slip Up

The road towards any goal comes with a few bumps along the way. If you overspend, simply adjust where you can and keep going. And know that Alltru Credit Union is always here for you.