Let’s face it. Making a budget can be a scary thing. Confronting how much money you spend each month on food and entertainment can be an eye-opening event. However, taking this step can greatly improve your financial wellness and get you on track to achieving your goals to save money and reduce debt. Take these three easy steps to create a budget that you can stick to.budget

Track your Spending

Count every penny and be honest with yourself. Small purchases such as your morning cup of coffee each day can add up quickly over any given month. It’s important to break down your expenses into essential and non-essential areas. Essential expenses include your mortgage payment, vehicle loans, groceries, and utilities. These expenses remain virtually the same from month to month. Tracking your spending will also help you identify non-essential items that you can cut from your monthly budget such as dining out and entertainment. Crane Federal Credit Union offers you multiple tools to make this process easier such as our Online Banking system and MoneySmart.

Make Savings Contributions Automatically

Pay yourself first. Experts recommend that you create an emergency savings account with at least $1,000 to take care of unexpected expenses such as medical bills or home and auto repairs. It’s inevitable that you will have a rainy day along the line. Being proactive in saving that money will ensure that you are prepared when those expenses occur. It will also reduce your stress and enable you to focus on your other goals such as saving for retirement and paying down debt knowing that you have a “rainy day fund” already set aside.

Live within your Means

It’s more important to live “comfortably” than to try and keep up with your friends and neighbors. If you find that you are spending more money each month than you earn, then it’s time to make some difficult choices. To combat this problem you have to either decrease your expenses or increase your income. Since it’s much easier to decrease your expenses, go back and evaluate those non-essential items and see what you can live without.