Recently my husband’s mom passed away, and as we went through the probate process, I began to feel like my husband and I hadn’t done enough to plan for the future. So I researched, and with every new thing learned, I began to feel better. Budgeting has almost become a dirty word for most adults. But it doesn’t have to be a pain. Here are a few easy steps to help you get started:
Look at income vs. expenses. First, identify your household income and establish a line you do not cross. Otherwise, you could easily end up with negative funds in your bank account or an extremely high amount of credit card debt. Next, lay out your essential costs—i.e., rent, food, utility bill, car payment, insurance—and subtract it from your income. Anything you have left over is extra. Just be sure to keep track of everything in a spreadsheet, either via Microsoft Excel or perhaps via the free online program in Google docs.
Develop a plan for your extra money. A good rule of thumb is to always put 10 percent of your income toward an emergency fund. You should also plan to save for upcoming expenses. For example, will you need funds to pay for an upcoming move? Or are you about to buy a new car? There are also a variety of ways to save and invest your money. You can choose several different types of investment opportunities, including stocks, bonds, or mutual funds.
Check out easy ways to save. There are credit cards and grocery store cards that offer rewards. Some credit cards allow you to earn cash back based on a percentage of your purchases, along with ones that give you travel miles that accumulate to use for flight or hotel purchases. Major nationwide grocery store chains—and even your local supermarkets—typically offer store rewards cards that save you money on specific items. These days, larger supermarkets that also include gas stations give you fuel points that can be redeemed based on dollar amounts that you spend at the store.
This is a tough subject to tackle, but I hope hearing about it from a fellow neighbor who until just recently felt overwhelmed will be helpful to those who just don’t know quite where to start.