Brian Ripp Legacy Real Estate & Associates Agent

Brian Ripp

REALTOR® CRS, GRI CalBRE #00886348

How to Build a Better Budget

Everyone knows the importance of having a budget – it helps keeps your finances in check by tracking spending and saving. But how do you create a budget? How do you ensure the budget will work for you? Following are some tips that may help you build a better budget:

  • Record What You Earn: Pull together your bank statements, paycheck stubs, etc. to help you determine an accurate picture of how much income you bring in each month.
  • Record What You Spend: Whether you write in a book or type it into a spreadsheet, it’s important to record how much you spend on utilities, groceries, entertainment, dining and, yes, even that lovely latte you enjoy each morning. Track your spending for a month or two to get a good idea of where your money is going and how it compares to what you earn. Also, determine which of these expenditures is fixed – they are constant each month – and which are variable – can change month to month for various reasons.
  • Don’t Overcomplicate It: Starting and keeping a budget doesn’t have to be complicated. In fact the easier it is for you to follow your budget, the easier it will be for you to maintain it throughout the years.
  • Wants, Needs and Whatnot: Your budget must include the money you spend on needs – e. g. mortgage/rent, groceries, utilities, etc.- but it should also include a certain percentage to put aside for savings as well as a percentage for “wants” such as dining out, going to the movies, etc. In other words, if you don’t plan for some fun in your budget, you’re less likely to stick to it. Remember, your expenditures shouldn’t be larger than your income. If they are, then you may need to adjust your “wants” to help lower your monthly expenses.
  • Ask for Help: If you just can’t seem to get a budget together for whatever reason, don’t be afraid to ask for help. There are many reputable credit counseling services and similar organizations that will work with you, at no charge or for a minimal charge, to create a budget that is best for your lifestyle. And remember, when finding such an organization to help you, if their promises to you sound too good to be true, they probably are.
  • Review and Adjust: A budget is a “living” thing – it should be reviewed regularly to ensure that you are staying on track. When reviewing your budget, check your actual expenses to what you have budgeted to see how they compare. This will give you an idea of where you may need to be adjustments in your spending so that you can stay on track.

If you’ve never tried living with a budget, why not give it a chance to help you take more control of your finances? You never know – it may help you plan for future expenses, a fun vacation or even help you get out of debt. So, don’t delay, gather all the information and create your budget today.