It probably brings a smile to your face each time your paycheck appears in your checking account. However, to make sure you are making the most out of what you’ve earned, individuals should create a budget. This process is less intimidating than it sounds. The following advice can help you look after your financial health.  

3 Tips for Creating a Budget

1. Know What You're Working With

There are three main parts of a budget: expenses, savings, and enjoyment. To ensure you don't overspend or ignore important components, sit down and determine your monthly income after taxes. Next, chart your monthly bills and their due dates. 

The goal is to spend 50% or less on expenses each month so that you can apply at least 20% of your income to savings and debt reduction and around 30% to wants.

After you've figured out how much of each check goes to expenses, delve out the remaining amount to the other two categories. From there, create a detailed breakdown of what needs spent or moved when. Then automate transfers and payments from your checking account if available. 

2. Put Every Dollar to Work

The best way to make your money grow is by using low-risk investment opportunities. Savings accounts are a popular method, as are share certificates and money market accounts. The goal is to build the amount of money you have by both adding to it and earning interest or dividends.

You can also save money by paying off interest-accruing debts. If your expenses don't take up 50% of your income, use that extra money to pay off loans and credit cards ahead of time.

3. Set Realistic Goals

Before saving up for big expenditures, like a vacation, research the associated costs thoroughly. After calculating a sum, create a savings timeline, and give yourself a few months leeway between the end of the goal and the event booking. This step prevents you from creating a financial burden for yourself. 

Spirit of American Federal Credit Union has served Lancaster County, NE, residents since 1932. Insured by the National Credit Union Administration (NCUA), the local financial institution is committed to the ever-evolving needs of its members. With convenient tools, like online banking for tracking checking account transactions and easy transfers to savings, they will help you stay on budget. Learn more about their accounts, investment opportunities, and loan offerings online. Direct any questions to (402) 467-1102.