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Neighbors FCU


A New Outlook for a New Year! - Tuesday, January 1, 2013

As you make your New Year’s resolutions, remember to include your financial well-being on the list.  How much we think we spend is often different than the amount we actually spend; some categories are underestimated while others are overestimated.  Many people come to workshops interested in learning how to make a budget because they want to see where their hard earned money goes.  These steps will help you make a budget, or financial plan, that is easy.

Gather some factual data:
For one entire month, gather receipts for every cent you spend and keep them in a zip-top storage bag.  Keeping this in your car or purse as you go about your daily routine will make this easy.  Also consider putting in a pen and a blank piece of paper to write down expenses where a receipt was not issued.  Stack regular house bills in one place where you can retrieve them easily.  These receipts and bills will be used to garner a real-life snapshot of your spending habits which will be the foundation for financial organization.

Make a list of your expenses:
Gather all your receipts and bills at the end of the month and sit down with a pen and paper.  List all your house bills and add them up; it’s helpful to see all household expenses added together.  Next, put your receipts in spending categories (such as fuel, groceries, coffee, eating out, etc) then add each group up and write those totals on your list.  You will have a realistic view of your spending habits.

Calculate your net income:
All of expenses are paid out of our take home pay from each payday ("net-income”), so add up your net income for the month and use this to start your calculations.  At this point all the research is done!

Do the math:
Net income – expenses = reality.  Total your monthly expenses, including house bills and all monthly receipts, and subtract if from your net monthly income.   Now you can clearly see if there is "left over money” or if you "don’t have enough money”; making desired changes is easy with all your expenses clearly written out.

"It’s not as bad as I thought”:
The number one comment people share when they complete this exercise is that it wasn’t as bad as they thought it would be.  Once you can see your spending plan organized this way, it’s easy to make adjustments that will benefit you and your family.

To learn more, check out our events calendar  for upcoming workshops.