Consider A Budget With Your Spring Cleaning
by Tricia of Allsup
April is Financial Literacy Month. While the celebration may only be for April, the financial knowledge you pick up can help you year-round. The first step to financial fitness is budgeting. Even though budgeting doesn’t sound like very much fun, it’s a great way to become more aware of how much income you have, how much your expenses are, and what expenses are taking the most of your income. Most people are surprised at what they find when they start writing it all down.
If you haven’t used a budget in the past, then creating one becomes even more critical with a severe disability. Losing your ability to work and that regular income is a shock to your financial system. But having a budget gives you a place to start.
By looking at these things regularly, you get a better idea of the items that you are spending money on that could be better spent elsewhere. For example, let’s say your income is $1,000 per month and you are spending $400 per month on eating out. If your household bills, including your rent, utilities and insurance exceed $600 per month, you may need to cut back on eating out.
If your budgeting shows you have extra money at the end of the month, you can put it into savings or build for retirement. Budgeting can also help you save up for those extra expenses that come up unexpectedly. If you know that you will need a new car in a year, get an estimate on how much the car will cost and plan to set aside a few dollars every month in your budget. That way, when it is time to purchase the car, you will have at least some of the money at your fingertips.
Now that you know why budgeting is important, you may wonder how to start. While budgeting can seem overwhelming, Allsup provides a number of resources, including a Home Budget Analysis Calculator, that can help. Once you have a good budget, you will be on the right track to financial fitness.