|
Setting Up a Budget Puts You in Charge Creating and following a budget can help ensure that your basic needs – housing, food, transportation, etc. – are met each month. It also lets you know how much you can afford to save for the future and how much you can spend on entertainment. Budgeting is a smart way of managing money that works for everyone. The following steps will get you started. Determine your income. Add up the amount you take in every month from your job, your parents and any other sources of income. If your parents pay certain expenses directly, such as your rent, you don't need to include that amount here. But make sure you don't include it in your expenses. Know what you owe. For a month or two, write down everything you spend your money on. Break your expenses into two categories: fixed and variable. Fixed expenses are expenses that stay pretty much the same each month. This can include things like rent, car payment, student loan, insurance, phone bill, and other utilities. Make sure you include savings in this category; it's important to "pay yourself first." Variable expenses change from month to month and may include groceries, clothing, entertainment, gasoline, and eating out. Compare your income and expenses. Ideally, you want the two figures to match. Having more income than expenses is great, but if you find you have more expenses than income, that spells trouble. If this happens, you'll have to: 1) adjust your spending to live within your means, 2) find a way to increase your income, or 3) both. Track your spending. Make sure you don't go over budget. You can do this by keeping an eye on your expenses, especially the variable ones like entertainment and eating out. This is easiest to do if you review it a few minutes each day. Once you get used to living on a budget, you'll find it empowers you. Having a spending plan puts YOU in charge of how your money is spent. |
 Have you had a good experience with DCU that you want to share with others? Send us an email at dcu@dcu.org or mail it to: DCU, PO Box 9130, Marlborough, MA 01752-9130, Attn: Marketing Dept. |
Visit Show Me and FoolProof Solo online for more money management advice and ideas. Visit dcu.org and select "StreetWise" then "Show Me." Images may be from one or more of these sources: ©Jupiterimages, ©Getty Images, ©iStock, ©SnapVillage. ©2009 Digital Federal Credit Union. Digital Federal Credit Union |
Marlborough, MA 01752-9130