Having a budget is one of the top financial tips on almost every financial website. It’s the first step in managing your money. While that seems like a simple task, many people don’t even know where to begin. And they’re not alone!

My son recently got his first full-time job. Benefits, retirement – the whole thing. He had received his first few paychecks when I asked how his budget was going. I was met with a blank stare. It was at that moment that I realized I had failed my child. As open as my husband and I are about our finances, we never showed our children how we built our budget.

I reached out to Todd M., TTCU Branch Manager, to ask how he helps members build their budgets. He first explained that people often have two big misconceptions about budgets:

  • Misconception #1: Budgets are restrictive. The truth is that a budget allows you to achieve your dreams.
  • Misconception #2: Budget building happens overnight. The truth is it can sometimes take several weeks to build a strong, realistic budget. 

Below are more tips Todd shared –

  1. Track every penny you spend. You can’t budget unless you know where you spend your money. You might think you spend only about $50 each month dining out. But once you track your spending, you might be shocked to find you spend double or even triple that amount.
  2. List all recurring, fixed expenses. These include things such as rent or mortgage, car payments, subscription services, childcare, etc. And don’t forget retirement contributions!
  3. List your variable expenses. These are items that vary by month or even week; things such as groceries, entertainment, utilities, dining out and gas.
  4. Once you’ve tracked your expenses for a few weeks, look at where your money goes. If you are struggling to make ends meet or want to save more for retirement, your variable expenses are a good place to make adjustments.
  5. Find a system that works for you. Many people use the envelope system, either using actual envelopes or an app. Others may opt for the 50/30/20 system or a different method altogether. The important thing is to find a method that works for you, and that you can stick with.  
  6. Do a “budget check-in” every few months. Does your budget still work? Have your life circumstances changed? 

You really can take control of your finances. It just takes a little time and some effort. But it doesn’t have to be overwhelming or frightening. And if you want a little help, TTCU is ready to lend a hand.

And as for my son, he has since built a budget that works for him and he’s thriving.