Budgeting: How to create a budget and stick with it


Making and sticking to a budget is a key step towards getting a handle on your debt and working towards a savings goal, of any kind.

Let’s say you want to set money aside for emergencies or you aspire to save up for a much larger goal like a car, down payment on a house, or retirement. Until you get a realistic picture of how much money you’re bringing in and where it’s going, it’s difficult to know whether you’ll have enough left over to put away.

Getting started can be the hardest part, especially if your finances feel out of control, but these easy-to-follow steps are designed to help you create a budget that really works for you.

  • Step 1: Where does my money come from? The first place to start is getting a complete picture of where your money comes from. You may be self-employed, have multiple jobs or receive child support or government benefits -- all of these sources should factor into what you have available to make ends meet. Start by recording all of your income.

  • Step 2: Where does my money go? Equally important but the heaviest lift is logging your spending so you get a realistic picture of what your money, on an average month, is going to. You need to both log and sort your spending by categories like utilities and housing to eating out and entertainment. If this feels overwhelming, start small and look at your expenses one week at a time by either reviewing your receipts or your checking account. You could also start a daily log of your expenses so you’re making sure to capture those small expenses -- like buying breakfast or lunch instead of bringing it with you -- that add up over time.

  • Step 3: What are all my bills and when are they due? If you’re coming up short at the end of the month, it could be that the timing for your bills and income don’t match. A bill calendar can help you remember when your bills are due but also keep in mind weeks when you need to be careful about your spending. Missing payments or not paying on time can also have larger impacts on your credit scores and overall financial well-being.

  • Step 4: Create your working budget. Once you’ve identified all of your income sources and started tracking your spending and when your bills are due, a budget worksheet pulls everything together so you have a working and realistic budget.

Creating a budget will help you figure out if you have enough money to cover your expenses, while also having enough to save or spend on something extra you may want for yourself or your family. Update your budget if you experience a change in employment or your spending habits.

Sticking to a budget

Changing and enhancing your money habits won’t happen overnight. Making – and sticking – with a budget takes effort, but here are a few important tips for being successful.

  • Create a tool that works for you. Be realistic and start looking at your finances one month at a time. Create a way that’s easy for you to track income and spending in real time, whether that’s a daily journal or putting receipts in a folder that you review at the end of each week.

  • Analyze your spending habits. This is an opportunity to take a comprehensive look at your spending, and it is also the easiest way to look for areas where you can cut back. If you know you’re prone to impulse spending, create a plan that’s doable to help you limit that spending.

  • Set a goal. Whether it’s small or large, it’s helpful to have an end goal and something you’re working towards. Also, rewarding yourself, even in small ways, can help you keep up with any progress you’ve made.

  • Develop a support system. Like sticking to an exercise routine, it’s easier when you’re surrounded by families and friends you can trust to offer you support, either by doing a budget with you or listening when you’re struggling.

You can take control of your finances!

If home ownership is in your plans for 2019 visit us at hfamiami.com/homebuyers to learn about our first-time home buyers’ mortgage, low interest rates and down payment assistance programs. Note, information in this post was derived from the Consumer Financial Protection Bureau.


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