Your One Step This Month:

Learn the Basics of Budgeting

What makes a budget such a powerful tool is that it gives you a clear picture of the way you spend money. While your monthly bills may be predictable, chances are you have other expenses that fluctuate from month to month. These can add up quickly, and if you’re not keeping track, you may end up spending more than you realize!

Using a budget can help you bring those expenses back under control. It puts you in charge of your money — just what you need to start making your financial goals a reality.

The Basics of Budgeting

Not sure where to begin? Here's how to create a budget that works.

Identify your income.

The first step to creating your budget is to identify your income. This includes your take-home pay — the income your job provides after taxes and other withholdings — as well as any other income from sources like financial aid, other family members who contribute to the household budget and so on. Tally these up to get a clear view of your monthly total.

Identify your expenses.

In many ways, a budget is a balancing act: On one side of the scale is your income. On the other side are your expenses. That’s why the next step in creating your budget is to identify all the ways you spend money each month.

Your fixed expenses are the ones that aren’t optional — things like rent, mortgage payments, credit card bills, student loans and so on. Flexible expenses are those that are optional — costs like a Netflix subscription, taking a vacation or going out to eat.

Once you’ve identified your expenses, see how they stack up compared to your income. Are you spending more than you earn? Or do you have a little left over each month?

Start a habit of saving.

One great thing about creating a budget is that it helps you see how you spend money. This, in turn, can encourage you to develop a habit of saving. Setting aside a little money each month offers some financial security and stability. It can also prepare you for those months when an unavoidable expense pops up unexpectedly. Your budget can also be a helpful tool for identifying which flexible expenses can be cut to develop a stronger safety net of savings.

Track your success.

As you track your income and expenses each month, it may take some trial and error to get the balance just right. That’s a normal part of the budgeting process, but don’t let it discourage you! Instead, track your success every month and adjust as needed. By making small changes over time, you can have a big impact on the way you spend money.

Want to Know More About Retirement Planning?

For everyone enrolled in a Heritage Group Retirement Savings Plan, Empower is offering one-on-one sessions with retirement education counselor Ed Manning. This is your chance to speak to an advisor and get answers to your questions!

Sign up to learn more about:

• Plan details
• Maximizing your employer match through The Heritage Group (up to 7% of your pay!)
• The funds in your Plan
• Investing basics, such as financial terminology and risk assessment
• Investment options
• Other tools to help you prepare for retirement

Sessions are available March 14 & 21. Click the button below to reserve your spot!

More Budgeting Tools from Empower

Monthly Budget Calculator

Need help figuring out your monthly budget? This calculator makes it simple.

Empower Budget Worksheet

A helpful, hands-on tool to help you develop your budget.

Strategies and Tools for Creating a Budget

More tips, strategies and tools from our partners at Empower.

Debt Payoff Calculator

This calculator can help you figure out how to pay off your debts — leaving you more money each month to put into savings.