An important step toward realizing your financial goals is creating a realistic budget. Budgeting helps you stay on track with your financial goals, organize your expenses and develop a spending plan.

Benefits of Creating a Budget:

• Develops a plan for your money - both where you spend it and how much you are able to save.
• Can help you establish an emergency savings for when unplanned expenses arise.
• Can help you reach all of the financial goals you have, whether it be a few years down the road or 20 years from now.

A budget is simply a spending plan that is based on your expenses and income. A written plan helps you stay on track, day-to-day and month to month, for meeting your financial goals. Creating a budget can easily be done with a pen and paper, using a spreadsheet, or a budget tool or app. 

Start by making a list of how much money comes in and how it’s spent.

Figure Out Income

Take a look at your paychecks, allowances, and any other regular income you earn on a monthly basis. Add these up to determine your total monthly income.

Calculate Expenses

Required expenses are required costs you pay regularly – these are must haves, such as gas, a monthly cell phone bill, or insurance. Total these costs to determine a baseline of your regular expenses.

Saving & Fun

After you deduct your expenses from income, the remaining can go into your savings account. You could also use these funds for discretionary spending like going to a concert with your friends or purchasing a new outfit. Just remember there are trade offs to spending money – whatever you spend now, you will not be able to put towards bigger purchases and financial goals.

Setting Goals

Setting priorities for your money helps you become prepared to achieve your financial goals. By setting financial goals, you know what you are sacrificing or saving for when making money decisions. Having these written down and consistently  in mind will help keep you focused and motivated.  

Creating a budget helps you focus your spending on what really matters to you. By budgeting your money, you control your spending habits, rather than letting your spending habits control you. Access our budgeting calculator below to help with your planning! 

Need help with your budget? Get help with our Budget Calculator or through a PFCU Financial Coach. To set up an appointment today use Live Chat Support, call 844-517-3611 or email pfcuinfo@pfcu4me.com.