Tax Time Tips: Budgeting Made Easy!<\/b><\/p>\n
As April 15 rolls around every year, many Americans vow to start paying more attention to their finances—including saving money for important goals and making smarter financial choices. Whether you are in your first apartment, are a long-time renter, or are returning to apartment living after owning a home, establishing a budget is a fantastic way for you to manage your finances while setting money aside for the things that matter most to you. These five steps can get you started.<\/p>\n
1. Set your goals<\/b><\/p>\n
Let’s face it, budgeting can be tedious! So before you dig into the nitty gritty of creating a plan for yourself, you need to have a good reason why you’re willing to do this work. Whether you want to travel the country (or the world!), pay off your credit cards or student loan debt, move to a new city, or expand your family, these compelling end-goals will help keep you focused when sticking to your budget becomes challenging.<\/p>\n
PRO TIP: Speaking of traveling the world, one of the tremendous advantages of living in a rental apartment or townhome is knowing that the exterior of your home will be protected and well cared-for while you travel! There’s no need to budget for lawn mowing or external maintenance.<\/p>\n
2. Determine your net income<\/b><\/p>\n
Everyone knows their total salary, but that’s not the most critical number when it comes to establishing a budget. What you need to know is what your take-home pay is after you deduct your contributions to Social Security, taxes, 401(k) accounts or flexible spending accounts. Essentially, the number you deposit into your checking account every two weeks (or every four!) is what you have to work with when you consider your budget.<\/p>\n
3. Spend a month tracking your spending<\/b><\/p>\n
Rather than create a budget that’s not realistic, take the time to actually track what you spend for at least four weeks. Don’t judge yourself, just write it down. Typical monthly spending includes two types of expenses: fixed monthly bills like rent, utilities, car payments, renters and auto insurance, etc., as well as variable expenses like groceries, gas, entertainment, gifts, eating out, etc.<\/p>\n
PRO TIP: If you use credit or debit cards for most of your purchases, you may be able to simply check out the last four weeks of your financial activity via your online statements to get an effective snapshot of your spending. But don’t forget expenses that occur less frequently than monthly! Some insurance bills only hit every six months, for example, but you’ll still want to include them in your overall monthly\/yearly spending plan.<\/p>\n
4. Create a spreadsheet<\/b><\/p>\n
This is where you take control! Create a monthly or yearly spreadsheet using a tool like Microsoft Excel or Google Docs. You can customize the spreadsheet for your unique needs, or use a template you find online, but most simple budgeting spreadsheets include the following columns:<\/p>\n
- \n
- Expense Category:<\/b> this is where you list all the categories of fixed and variable monthly expenses you have, such as entertainment, gas, utilities, etc. For bills you receive quarterly, you can determine how much to allocate monthly and include that amount in each month’s budget OR simply add them to the month when you need to pay the bill, making sure that you have enough money set aside to make the payment.<\/li>\n
- Amount paid – budgeted:<\/b> This is the amount you either know (for fixed expenses) or think (for variable expenses) you will be paying each month for each of your expense categories.<\/li>\n
- Amount paid – actual:<\/b> This is the amount you’ll fill in each month to record how much you actually spent in each category… you’ll see pretty quickly where your expectations don’t match reality!<\/li>\n<\/ul>\n
PRO TIP: Make sure your budgeted payments do not exceed your monthly net income! If they do, go back and make some changes on how much you’re willing to commit to variable expenses (or cut out a “fixed” expense that is not a necessity).<\/p>\n
5. Adjust, adjust, adjust!<\/b><\/p>\n
The most successful budgets are those that get tweaked over time to match your changing spending habits. By taking a few minutes every month to update your budget with your spending, you’ll be able to see where you are spending too much, or perhaps what new categories you want to add to make your budget more complete. Once you get used to working within a budget, you’ll find that it’s far easier to say “no” to impulse purchases that will keep you from reaching your long term goals.<\/p>\n
Budgeting is a simple process with a potentially fantastic payoff. You’ll be surprised at how quickly the money adds up when you take the time to commit just a few minutes a month to achieving your financial goals! And every time something new happens – you get a raise, receive an unexpected tax return, or find a roommate to share expenses – you’ll be able to put that “found money” toward dreams that really matter to you.<\/p>\n
Here’s to reaching your financial goals!<\/p>\n","protected":false},"excerpt":{"rendered":"
Tax Time Tips: Budgeting Made Easy! As April 15 rolls around every year, many Americans vow to start paying more attention to their finances—including saving money for important goals and making smarter financial choices. Whether you are in your first apartment, are a long-time renter, or are returning to apartment living after owning a home,… <\/p>\n
- Amount paid – budgeted:<\/b> This is the amount you either know (for fixed expenses) or think (for variable expenses) you will be paying each month for each of your expense categories.<\/li>\n