The mission of Broadview Financial Well-Being is to guide and encourage individuals to focus on achieving economic stability - using innovative tools, making informed decisions, and encouraging positive habits.
The mission of Broadview Financial Well-Being is to guide and encourage individuals to focus on achieving economic stability - using innovative tools, making informed decisions, and encouraging positive habits.
The mission of Broadview Financial Well-Being is to guide and encourage individuals to focus on achieving economic stability - using innovative tools, making informed decisions, and encouraging positive habits.
In this topic, we cover:
In addition to creating a budget, tracking every purchase for at least a month or two can provide more insight into your spending than you may expect.
Why should you bother tracking your spending? A monthly budget is just a plan - your actual spending behavior may differ completely. By not tracking your spending, you're essentially flying blind. You won't know where you got off track or how to fix it. We all make important financial decisions every day. Tracking spending helps you identify spending habits that can have negative long-term consequences, ultimately leading to a more secure financial future.
Every month, there are countless ways to spend more than planned, including on things that weren't included in your budget. Small expenses can add up unexpectedly, so tracking your spending ensures that it aligns with your spending plan.
There's no doubt that tracking your spending takes work, and it's easy to feel like you don't have the time. However, tracking spending is one of the best ways to stay on track to reach your financial goals and avoid credit card debt. Think of it this way – avoiding credit card debt by sticking to a spending plan means you automatically get a 20 or even 30-percent discount on whatever you would have bought on a credit card and paid off over a year. That's a great deal for anyone!
If you've created a budget using this website's Monthly Budget Calculator, your figures have been saved and are available for review anytime. You've already done some serious financial planning. Now, it just needs a reality check compared to your actual spending.
Tracking Your Spending
Tracking your spending for at least one month is the best way to get an accurate picture of it.
Some spending is a breeze to track - rent or mortgage payments, car insurance, and utility bills are typically paid by check or bank draft, so there's always a record available. On the other hand, groceries, dinners out, coffee, or vending machine snacks can be more challenging to track, especially if you use cash. If you use cash and cards for everyday purchases, it's often easiest to keep every receipt. Then, at the end of the day or week, total your receipts and categorize each expense. It's more straightforward than it sounds, and the benefits are worth the effort.
This website also offers a Budget Tracking tool, a simple and effective way to track your spending. Once you have totals for each category in your budget, you can enter the figures in the Budget Tracking tool to compare with your Monthly Budget Calculator figures. We'll also give you feedback on cash flow, luxury spending, and other factors. You can enter expenses at any time during the month or save it all for the end. Your results are saved every month, making it easy to track your progress over time, and you can always export your figures to a spreadsheet if needed.
In addition to our Budget Tracking tool, other options include:
No matter which option you choose, the important thing is to get started. If needed, you can modify your approach over time to find what offers the most information with the least effort.
Dealing with Setbacks
There can be times when there's not enough money to cover necessary expenses. One strategy for this unpredictable situation is to set up an emergency fund - a savings account with cash set aside to cover the unexpected. Most experts suggest having three months (or more) of your salary in your emergency fund. If you don't have savings, most banks can automatically divert a portion of your income into a savings account. Starting with as little as 5% of your paycheck into the fund is a great place to start.
Even an emergency fund is no guarantee against financial trouble, however. If you're losing money each month, even after trying to balance your budget, seek help from a qualified professional. A serious debt problem can happen because of a single catastrophic event (like a job loss), but it can also happen slowly. What could have been a manageable situation can rapidly become a life-changing financial burden.
The Takeaway
Engaging with your spending is critical to making informed financial decisions. And maintaining a monthly budget is not just a good idea - it's one of the best ways to achieve lasting financial health.
Most people can't just make a budget once and be done - it's a flexible process of trial and error until you find a budget that meets your spending goals. But remember, if you overspend one month, make up for it by spending less over the following days or weeks - don't give up. Sooner or later, you'll find the perfect budget for your unique goals, challenges, and opportunities.
Join Broadview educators for a unique, live, interactive webinar experience. Find our ongoing schedule in the Event Calendar, and learn more about us in the link below. Do you have a group or organization that could benefit from financial education? Topics are available for all ages and education is always free. Contact us to make a request.
Have a question?
Broadview Financial Well-Being
1-800-727-3328 x 1314066
financialwellbeing@BroadviewFCU.com