Why Create a Budget?
Budgeting Helps You:
- Prioritize how money is spent.
- Discover areas of waste.
- Plan for unexpected expenses.
- Save for your family's future.
- Reduce money-related stress.
Creating and following a budget is essential to financial security. Though many powerful tools are available to help you manage money, a pencil and paper will suffice. Let's get started!
Why Create a Budget
Budgeting Helps You:
- Prioritize how money is spent.
- Discover areas of waste.
- Plan for unexpected expenses.
- Save for your family's future.
- Reduce money-related stress.
Creating and following a budget is essential to financial security. Though many powerful tools are available to help you manage money, a pencil and paper will suffice. Let's get started!
Create a Budget 101
Know Your Current Situation
If you’re not already there, it’s time to get up close and personal with your cash inflows and outflows. Track everything coming in and going out, so you’ll have a solid grip on what needs to change. Notice the additional resources in our sidebar.
For inflows, pay attention to more than just your paycheck. Gifts, tax refunds, rebates, proceeds from selling stuff – if it is money coming in, it all counts.
For outflows, the same thinking applies. Out-of-the-ordinary expenses like gifts or new tires for your car need to be accounted for just like recurring outflows. Watch, "Budgeting Step 1: Know Your Current Situation," to learn more.
Know Where Your Money Should Go
Every situation is different but there are some great budgeting rules that can help you get on the right path. For example, saving and investing should generally be 10-15% of pre-tax pay. Taxes will often take up another 20%. Vehicle expenses should be limited to no more than 10%. Housing should generally be no more than 20-25%. Watch, "Budgeting Step 2: Know Where Your Money Should Go," to learn more.
Create a Plan
Now that you know what your situation really looks like and what you should be doing with your money, it’s time to put the two together and make a plan.
Funding your goals should come first, and when it comes to cutting back, no expense category should be off the table.
Just be careful not to cut so much that you won’t be able to sustain your plan over the long term. Watch, "Budgeting Step 3: Create a Plan," to learn more.
Make Adjustments
As your life changes, so should your budget in many cases. Be alert for coming changes to both inflows and outflows so you can make adjustments sooner, rather than later.
A good plan will require frequent adjustments to make sure it evolves with your life. Watch, "Budgeting Step 4: Make Adjustments," to learn more.
MilLife Milestones
Dig Deeper
Related Videos
Create a Budget 101
Know Your Current Situation
If you’re not already there, it’s time to get up close and personal with your cash inflows and outflows. Track everything coming in and going out, so you’ll have a solid grip on what needs to change. Notice the additional resources in our sidebar.
For inflows, pay attention to more than just your paycheck. Gifts, tax refunds, rebates, proceeds from selling stuff – if it is money coming in, it all counts.
For outflows, the same thinking applies. Out-of-the-ordinary expenses like gifts or new tires for your car need to be accounted for just like recurring outflows. Watch, "Budgeting Step 1: Know Your Current Situation," to learn more.
Know Where Your Money Should Go
Every situation is different but there are some great budgeting rules that can help you get on the right path. For example, saving and investing should generally be 10-15% of pre-tax pay. Taxes will often take up another 20%. Vehicle expenses should be limited to no more than 10%. Housing should generally be no more than 20-25%. Watch, "Budgeting Step 2: Know Where Your Money Should Go," to learn more.
Create a Plan
Now that you know what your situation really looks like and what you should be doing with your money, it’s time to put the two together and make a plan.
Funding your goals should come first, and when it comes to cutting back, no expense category should be off the table.
Just be careful not to cut so much that you won’t be able to sustain your plan over the long term. Watch, "Budgeting Step 3: Create a Plan," to learn more.
Make Adjustments
As your life changes, so should your budget in many cases. Be alert for coming changes to both inflows and outflows so you can make adjustments sooner, rather than later.
A good plan will require frequent adjustments to make sure it evolves with your life. Watch, "Budgeting Step 4: Make Adjustments," to learn more.
MilLife Milestones
Dig Deeper
Related Videos
Recent Blogs
How to Protect Your Personal Finances Now
The COVID-19 pandemic sweeping the country and world is having a dramatic impact on how we live our lives and function within our communities. Many of us are affected by school and work closures and possibly even stay-at-home orders. Military families may also face additional uncertainty with the Stop Movement order impacting future assignments and…
Read More
2019 Tax Prep: Back to Basics
It’s tax time again. And while the federal income tax filing deadline for 2019 has been extended to July 15, 2020, that date will be here before you know it. Whether you’re preparing your own taxes or seeking professional assistance, here’s some guidance on what documents you need and where to get additional support to…
Read More
Staying on Track with Your Financial Goals
You Can Do It! Stay on Track with Your Financial Goals Did you set any financial goals or resolutions for the new year? If so, the end of each month is the perfect time to see if you’re staying on track with your financial goals. Set SMART goals Hopefully, you set goals that were SMART:…
Read More
Start the New Year Right, Set Financial Goals
As 2019 draws to a close, many of us are looking toward the new year with big plans and aspirations. Carry this excitement over to your finances, too! Set financial goals in the new year to build a stronger financial future for you and your family. The previous year is history. You cannot go back…
Read More
Tackle Unexpected Expenses with an Emergency Fund and Help from Relief Societies
One of life’s certainties is that it is uncertain, right? Life can throw a curveball in the form of a lost job, vehicle or home repair, health costs, or emergency travel, just to name a few. When these events occur, they can create havoc for a family’s financial stability. However, planning ahead and being familiar…
Read More
Reimbursement for Relicensing Fees Is Here, Milspouses!
Reimbursement for Relicensing & Certification Fees for Military Spouses The Department of Defense (DoD) recognizes the challenges many military spouses face maintaining a career while moving every few years. So, the DoD introduced the National Defense Authorization Acts of 2018 and 2020, which allow each branch of service to reimburse military spouses for qualified relicensing…
Read More
5 Steps for Sending Your Military Kid Back to School on a Budget
Back to School on a Budget It’s back to school time! And while parents may be breathing a collective sigh of relief, it might be a different story when it comes to their wallets. According to a recent survey, families with school-age children spent on average almost $700 in 2019 to equip their kids for…
Read More
Changes to the Post-9/11 GI Bill’s Transferability Rules Coming January 2020
Post-9/11 GI Bill Transferability Rules Significant changes were made to the transferability rules for the Post-9/11 GI Bill, which were to become effective in July 2019. However, the Pentagon recently delayed these changes until Jan. 12, 2020. It is important to act now if these changes impact you and your family. Transfer Post-9/11 GI Bill…
Read More
Money Ready 101
Money Ready 201
Money Ready 301
Money Ready 401