Building A Budget That Works: The Power of Paycheck Planning
Building A Budget That Works: The Power of Paycheck Planning
Building A Budget That Works: The Power of Paycheck Planning
Credit.org
The Power of Paycheck Planning:
The time to stop overspending and get control of your finances is right now.
Before you construct a budget, there are some things you should do first:
• Relax.
Take it one day at a time. You’re not going to build the perfect budget right
out of the gate. It will take some adjusting to get things right.
TRACKING YOUR SPENDING
Use whatever method works for you; the main objective is to track
where your money is going. But remember, tracking will only work
if you include every single expense. Every time you drop 75¢ in a
vending machine, you have to make note of it.
This process may be tedious at first, but stick with it. Eventually
you’ll be recording your spending automatically, like recording
checks in your register or brushing your teeth every morning.
A mid-range goal takes between 2 and 5 years to accomplish. Saving for a car might be a
good mid range goal.
Long-term goals take over 5 years to achieve. Saving for retirement, college, or to purchase
a home are common long-term goals.
Financial Goals Target Date Total Needed Current Savings Additional Number of pay Savings Savings
Savings periods until Needed Needed
Needed target date Per Pay Period Month
Short-Term Goals
Mid-Range Goals
Long-Term Goals
Total:
ADDING IT ALL UP
Total Discretionary Whatever you do, don’t cut into the 10% - 15%
Expenses
you should be saving; you need to save up to
Total Debt three – six months’ income to get through an
Payments emergency before you can start saving for
anything else. For now, set reasonable,
Total Monthly attainable goals; you can also push a goal’s
Expenses
deadline back and give yourself more time to
save money.
And then see if your budget balances:
Re-evaluate your budget periodically, especially
Total Monthly Net
Income
when your income or needs change. A budget is
simply a guideline, a tool to help you save to buy
Minus Total Monthly the things you want. With smart money
Expenses management and clearly defined goals,
Balance (+/-)
consumers can come to rely on credit cards less
and less.
EVALUATE YOUR SPENDING
The ranges indicated here will vary with income levels, family size,
and personal choice. Work with these figures to establish your
own guidelines.
If you are unable to bring your spending in line, check out our
other materials or call us for free, confidential credit counseling.
Medical Savings
Utilities
Medical insurance It’s crucial that you set
Gas, electricity, water, premiums, prescriptions,
trash, sewer and aside 10% for your
8%-15% telephone (regular & 8%-15% doctor and dentist bills. 5%-10% goals, starting with an
emergency savings
cell).
fund.
Debt Payments
Food Clothing
Installments Credit
All food items, dining All clothing purchases, card payments,
out, pet food. shoes & alterations.
10%-20% 3%-5% 10%-20% personal & student
loans, any other debt
payments.
CREATE YOUR BUDGET
Necessary Expenses Current Proposed Discretionary Expenses Current Proposed
Housing Rent/Mortgage Personal Beauty/Barber
2nd Mortgage Clothing/Jewelry
Property Taxes Cosmetics
Insurance Manicure/Other
HOA Dues Entertainment
Gas/Electricity Cable
Water/Sewer/Trash
Movie/Video
Telephone
Dining Out
Food
Groceries Sports/Hobbies/Clubs
Dining Out Vacations/Travel
At work/school Books/Magazines
Insurance MP3/Concerts
Life Miscellaneous
Health/Dental Pet Care/Vet
Disability Gifts
Medical Care Cell Phone
Doctor Postage
Optometrist/Lenses Cigarettes/Alcohol
Dental Donations/Tithing
Prescriptions Internet Access
Transportation Other
Car Payment 1 Total Discretionary Expenses:
Car Payment 2
Insurance
Debt Payments
Gas/oil
Repairs Creditor Name Monthly Payments
DMV/Smog
Tolls/Parking
Public Transportation
Child Care
Daycare/Sitting
Child Support/Alimony
Miscellaneous Total Debt Payments:
Banking Fees
Laundry
Other Remember, your budget should be flexible. Keep
Income Taxes adapting and changing it until it fits your lifestle.
Prior Year
Estimated Tax Payments
Check out our blog at www.credit.org/blog for ideas
Savings about saving money and making your budget work.
Emergency Also, check out our full “Power of Paycheck Planning”
Goals webinar and online course in our FIT Academy.
Total Essential Expenses
A CLOSER LOOK AT SPENDING
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TION EP
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Our Services Include:
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Department of Housing & • Credit and Debt Counseling
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• Financial Education Programs (seminars and materials)
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