Budgeting

Steps:
1. Assess your financial resources
The first step is to calculate how much money you have coming in each month. This might be investment
income, government assistance, student loans, employment income, disability benefits, retirement
pensions or money from other sources.

2. Determine your expenses

Next you need to determine how you spend your money by reviewing your financial records. If your
records aren't clear, consider keeping a financial diary to track your spending.

Be sure to separate the fixed expenses that you must meet (mortgage, rent, car payments, insurance)
from variable expenses (food, clothing, entertainment, charitable gifts). Once you see your spending
patterns, you may be able to make adjustments to certain expenses.

3. Set goals
Establish a list of the goals you wish to achieve. These can be long-term goals like purchasing property or
funding your retirement. Or they can be short-term goals such as home improvements or car
maintenance.

4. Create a plan
Once you've figured out how much money is coming in and where it's going, you can put together a plan
that matches your goals with your financial situation.

5. Pay yourself first

When you pay yourself first you simply set aside a certain amount of money each month to go into an
account that you will not touch. You can set up a separate savings account for infrequent but anticipated
expenses, such as property taxes, vacations, automobile insurance or car maintenance. Our Jumpstart® is
specially designed for these types of savings plans.

6. Track your progress

At the end of each month, you should re-evaluate your budget. Compare your actual expenses and
income to your budget and make appropriate adjustments.

Once your budget is done, things are bound to change. They always do. So stay flexible. And remember,
a budget is only a guideline. It doesn't factor in non-financial considerations that can result from drastic
changes in spending habits.
Importance of budgeting:

1. Control Your Spending: When you operate your

finances without a budget, you don’t really have anything holding
you back from spending beyond your means. Sure, you might have
a general idea about how much money you can spend each month,
but without hard, accurate numbers, it’s easy to lose control of
your spending habits.

2. Keeps You On Track For Your Financial

Goals: Along the same lines of controlling your spending,
budgeting is important because it keeps you on track when you are
trying to achieve your financial goals.

3. Financial Contentment: Financial contentment is one

of the foundational elements of good financial behavior. It keeps
you from spending money that you don’t have, and helps you to
enjoy your financial journey.

4. Keeps You Organized: it’s easier to live on a budget

and keep your financial life organized, than it is to try to get your
finances in order after you have allowed them to get disorganized.

5. Prepared for emergencies:  life is full of all sorts of emergency

expenses. From hospital bills to unexpected home repairs, if you don’t prepare
your finances ahead of the game, you won’t be ready when those expenses come
your way. And that can get pretty painful. On the other hand, if you make a
point to save for emergency expenses in your monthly budget, then you
can avoid all sorts of financial difficulty.