Developing a Budget

February 13, 2018April 19, 2018 Rickie Keys 880 Views

It is important for you determine where your money is going each month. Whether you’re trying to create a personal spreadsheet to better manage your money, saving for retirement or working to achieve other financial goals, establishing a budget is critical. This process takes seven (7) steps and this calculator will help you achieve whatever money goals and objectives you wish to accomplish. Watch the video and use the tool to develop your budget…

Step 1 of 7 - Contact Information

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Developing a Budget
You need a way of determining where your money is going each month. Creating a budget with a template can help you feel more in control of your finances and let you save money for your goals. The trick is to figure out a way to track your finances that works for you. The following will enable you to create a budget.
Step 1 - Budgeting goals
Check all of your budgeting goals*
- Build an emergency fund
- Buy a house
- Get out of debt
- Pay off student loans
- Prepare for retirement
- Take a family vacation
- Save for your child’s college education
- Save to meet a short-term goal

Step 2 - Sources of income
List your monthly income from all sources
Alimony, child support (received)
Dividends from stocks, etc.
Interest on savings accounts, CDs, etc.
Pensions
Social security benefits
Wages, salary and tips
Total Income

Step 3 - Sources of Expenses
List your monthly expenses (fixed and variable) for all sources
Automobile loan(s)
Automobile expenses (gas, repairs, etc.)
Automobile insurance
Charge accounts
Child care
Clothing and laundry
Club dues
Educational expenses
Entertainment and dining
Federal income taxes
Food
Gifts
Hobbies
Homeowners (renters) insurance
Household repairs and maintenance
Life insurance premiums
Major home improvements and furnishings
Monthly mortgage payment or rent
Other taxes
Other transportation expenses
Personal loans
Professional services
State income taxes
Real estate taxes
Recreation and travel
Utilities
Other and miscellaneous expenses
Total Expenses
Hidden
Budget Surplus or Deficit
Hidden
Budgetary Surplus or Deficit

Step 4 - Make a Plan
Based on the amount of income that you have and the fixed and variable expenses that you have compiled, identify which of these specific things you plan to do to increase your net monthly income.
Check all of the strategies that you will employ to get in the black*
- Increase my income
- Reduce my expenses
- Keep my goals and objectives top-of-mind
- List and pursue monthly and annual budget, and saving and investment strategies

Step 5 - Establishing an Emergency Fund
Your costs add up fast. Therefore, building a healthy amount of money in savings is critical. This may seem like a pipe dream, but small, incremental steps change help you develop savings for emergencies, unexpected situations and other occurrences. .
Check all of the strategies that you will employ to develop an emergency fund*
- Saving one percent of your income over the next month
- Divide all of your expenses into two categories: “needs” and “wants"
- Pay yourself monthly as another expense
- Set up your saving using an automatic transfer
- Work towards your savings goals gradually and incrementally

Step 6 - Going Beyond Your Budget
It is important to develop and stick to a budget. But, in order to improve your financial health, you must routinely assess where you are. You should not simply pit your income against your expenses, but you should find other money-oriented ways to improve your financial health. These are other things that you should consider.
Check all of the strategies that you will employ to improve your overall financial health*
- Take the Financial Stress Test to determine your financial capability
- Use the MyMemorial Planning tool to develop a plan to protect your family
- Identify other (online) ways to generate income
- Use our DIME Calculator to make sure that you have the right amount of life insurance
- Understand your assets and liabilities
- Assess and reassess your goals and objectives
- Check your credit report
- Manage your taxes
- Make sure that your goals and objectives and your investment strategies align

Step 7 - Paying Down Your Debt
For most, getting out of debt is overwhelming, burdensome and costly. That’s why it’s important to clearly identify your debt, understand your options and choose a right plan to payoff your debt.
Check the strategy that you will employ to pay off your debt*
- Pay off the lowest balance debt first
- Pay off the highest interest rate debt first
Based on this strategy, are you prepared to list all of your debt based on the highest balances and then make repayments from highest to lowest balance?*
- Yes
- No
Based on this strategy, are you prepared to list all of your debt based on the highest interest rate and then make repayments from lowest to highest interest rate?*
- Yes
- No
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