The Easiest Way to Start Budgeting

Why budget? To reach our goals! Budgeting keeps us on-track to reach our goals. The easiest way to start is just to keep it simple. Here are a few things that can help:

1. Pick a Simple Method

There are many different budgeting systems, so just start with one that’s easy for you to manage. Two beginner-friendly ones:

• 50/30/20 Rule
  
  • 50% → Needs (rent, groceries, utilities)
    
  • 30% → Wants (eating out, entertainment)
    
  • 20% → Savings or debt payoff
    
• Zero-Based Budget
  
  • Every dollar has a job → income minus expenses equals zero.

Pick whichever feels less stressful to track.

2. Know Your Income

Use your take-home pay. That’s the money you end up with after taxes. Your take-home pay is the real number you have to work with each month.

3. Track Your Spending

For a budget to work, we have to know how much we are actually spending. Not how much we hope we’re spending, or wish we were spending. So be sure to track your spending for a month to see where your money really goes.

Easiest tools:

• Apps: Mint and YNAB (You Need A Budget) are two of the best and have been around for years. Your bank might even have an app for you to track your spending.
  
• Simple spreadsheet: Google Sheets or Excel are two simple, yet very effective options.
  
• Notebook method: Old-school pencil and paper still works just fine.

4. Set Small Goals

Start with one or two goals:

• Build a $400 emergency fund. Did you know that 29% of Americans don’t have $400 saved for an emergency?
  
• Pay off a credit card.
  
• Save for a weekend trip.

Small goals will allow you to feel progress more quickly, and that will keep you motivated.

5. Review Your Spending Monthly

At the end of each month:

• Check to see if you overspent anywhere.
  
• Adjust next month’s budget, if needed.
  
• Celebrate small wins!

If you’d like more in-depth help creating your budget, one of CCOA’s financial professionals can help. Simply call (479) 521-8877, or fill out our online appointment request form, and request your free budgeting appointment.