Financial Literacy Month: Budgeting and Saving

Learning to save and budget can be intimidating, but knowing how to manage your money effectively can set you up for success in the future. A budget is essential to help you avoid overspending, reduce debt, and plan for future goals. To develop a budget, you need to know your income and expenses.

Your income is all the money you have coming in, including your wages, any freelance jobs you may have, retirement benefits, and disability payments. Once you have determined your income, you need to identify your expenses. Expenses are anything that your money is going towards and can include the following:

• Rent or mortgage payments
• Insurance
• Utilities
• Transportation (Car payment, gas, public transportation)
• Internet
• Cell phonesEntertainment
• Debts
• Family Expenses
• Savings
• Groceries
• And more

Once you have your income and expenses figured out, you can use that information to make a budget. If you’ve made a budget but are finding that your money isn’t going as far as you'd like, it may be a good idea to consider what items in your budget are ‘needs’ and ‘wants’ to find what's eating away at your income. Finding a method that works for you is crucial when making your budget. Remember it will take time and practice to make it feel natural, so don’t be afraid to try different strategies if another isn’t working for you.

Having a savings gives you some cushion to fall back on in the event of unexpected financial setbacks, like emergencies, repairs, job loss, or reduced work hours. Additionally, savings can make goals like home buying, future education expenses, and retirement possible. You can make short-term goals, usually around 6-12 months, and long-term goals, generally around 3-5 years, but it's important to make sure those goals are realistic for the time frame you have established.

You can check out our suggestions on different strategies and activities to help get you started with budgeting or saving at cpfcu.com/family!

Citations
National Credit Union Administration. (2023, March 24) “Financial Capability Month” mycreditunion.gov. https://mycreditunion.gov/financial-resources/calendar-events/financial-capability-month

National Credit Union Administration. (2023, August 17) “Money Basics Guide to Budgeting and Savings” mycreditunion.com. https://mycreditunion.gov/sites/default/static-files/money-basics-guide-budgeting-savings.pdf

National Association of Student Financial Aid Administrators. (n.d.) “10 Tips for Financial Literacy month” nasfaa.org. https://www.nasfaa.org/10_tips_for_financial_literacy_month
 

Posted by: Ashton Osborne, Public Relations Specialist