Budgeting is the cornerstone to anyone’s personal financial plan, whether you’re saving a lot of money already or you’re behind on your financial obligations. A budget tells a financial story and yours will be a successful one by planning, tracking, and adjusting.
Get Started
In its most basic form, the budget includes income, expenses, and debts. Use our Interactive Budgeting Worksheet to get started.
Begin by identifying your income and debt payments, as those numbers tend to be similar from month to month. Then, work to get an understanding of your variable expenses which often seems to be the most challenging for people. Don’t forget to include periodic expenses in your budget such as car insurance or property taxes. Periodic expenses tend to sneak up on people because they are not budgeted for ahead of time. This can result in progress towards financial goals being derailed and potentially escalating debt. Learn more about managing periodic expenses.
Financial experts have guidelines for recommended monthly expenses. After you create your budget, compare your spending to the guidelines below:
Recommended Monthly Expenditures
Category % Monthly Take-Home Pay
Mortgage/Rent 25-35
Food 18-23
Consumer Debt 10-20
Savings 7-10
Other Expenses 12-40
Keep in mind that these ranges are just a guideline. Everyone’s budget will look different based on financial situations and goals. Remember that this is your budget, and it should reflect your financial situation, your financial goals, and your financial priorities. If being able to go out to eat regularly is important to you, it’s okay if your eating out budget is larger as long as you have accounted for it in your budget and are comfortable that your other needs are met and goals are being worked towards.
Evaluate and Adjust
Keeping track of your income, expenses and debts will allow you to continually monitor your budget as you move toward accomplishing your goals. Most people tend to underestimate their expenses by about 25%, this is why tracking your expenses is an important step of budgeting. Remember, your budget is like a muscle. If it is not worked and exercised, it will get weak. So, exercise your budget every week to keep your finances strong.
Free Financial Counseling
This information was provided by our partners at GreenPath Financial Wellness, a nationwide non-profit that provides financial education and tools to empower people to lead financially healthy lives.
GreenPath’s certified financial counselors are available to conduct free, confidential assessments on a variety of topics:
To get started, call 877-337-3399 or visit www.greenpath.com/partner/nepa to learn more and request a call.
