Budgeting

Budgeting is the cornerstone of financial health. It helps you track your income and expenses, ensuring you live within your means and save for the future. By creating and sticking to a budget, you can reduce financial stress, avoid debt, and achieve financial freedom.

Before you can create a budget, you need to understand your current financial situation. Gather all your financial statements, including bank accounts, credit card statements, and bills. Calculate your total monthly take-home pay and list all your monthly expenses using our free budget worksheet. Download our Monthly Budget Worksheet here .

Tip: To get an accurate read on what you are spending now, take an average of the last couple months. It may seem like a high number, but it is what you are currently spending. Budget what you are spending now. You can reallocate what you don’t spend and budget differently in the future as your spending patterns change.

What do you want to achieve with your budget? Whether it’s saving for a down payment, paying off debt, or building an emergency fund, setting specific, measurable goals will keep you motivated.

SMART Goals: Ensure your goals are Specific, Measurable, Achievable, Relevant, and Time-bound.

Using the Monthly Budget Worksheet, subtract your total expenses from your total income. Ideally, you should have a surplus that you can allocate towards savings or paying off debt. If your expenses exceed your income, identify areas where you can cut back.

Tip: If your expenses exceed your income, consider these tips to cut back some of your spending:

• Limit Dining Out — Eating out frequently can drain your budget. Try to cook at home more often and save dining out for special occasions.
• Review Subscriptions — Cancel any unused or unnecessary subscriptions. These can add up quickly and are often forgotten.
• Shop Smart — Look for deals, use coupons, and compare prices before making purchases. Buy in bulk for items you use frequently to save money in the long run.
• Plan Meals — Meal planning can significantly reduce your grocery bill. Plan your meals for the week, make a shopping list, and stick to it. Avoid impulse buys by eating before you shop.

Regularly monitor your spending to ensure you stay within your budget. You can then adjust your budget as needed to accommodate any changes in your income or expenses.

Tip: Keep all receipts and update your budget weekly to stay on track.

At the end of each month, review your budget. If you share this budget with another person, this should be done with that person, at least periodically. This will help you to be on the same page and stay aligned with your goals.

Compare your actual spending to your budgeted amounts and adjust for the next month. This practice will help you identify areas where you can improve and continue making progress toward your financial goals.

Building an emergency fund is important to help shield yourself from unforeseen expenses. It’s best to be prepared, rather than to resort to high-interest options during emergencies. Begin by setting aside $1,000 (or one month’s expenses if possible) in a separate, easily accessible savings account. Once you’re debt-free, aim to save three to six months’ worth of living expenses for added security.

Set aside funds in a separate share savings account for any big purchases, taxes, utilities, childcare, vacations, or holidays. Take the total amount for each expense and divide that by how many pays you receive in a year (usually 26 or 52). This amount should go in a separate share savings account on a per-pay basis. Campbell FCU can help you open a Christmas Club or additional share savings accounts for sinking funds.

Add up your large, fixed expenses (mortgage/rent, car payments, etc.) and divide that total by your number of pay periods in the month (usually 2 or 4). This amount should go in a separate share savings account on a per-pay basis. Campbell FCU can help you open these additional share savings accounts.

Tip: Set up auto-pay from this separate share.

Have a portion of your check automatically disburse to your savings and sinking funds accounts. It is easier when everything runs automatically!

Campbell FCU can help you set up direct deposit, and scheduled transfers can be set up in our online banking.

There are alert features within online banking for your credit union and bank accounts, as well as within your credit card and loan accounts. Set payment alerts, low balance alerts, or any others that will help you best manage your finances.

Set all your other bills to automatically be withdrawn from your Perks Checking Account, including at least the minimum payments on credit cards (this will ensure that you never accidentally miss a payment). Add up all the bills that come out of your checking account and divide that total by your number of pay periods in the month (usually 2 or 4). This amount should be deposited into your checking account to pay the following month’s bills. Your minimum balance in your checking account should be the total of all the bills that come out of this account.