Understanding credit cards, personal expenses, taxes, large purchases, student loans, and insurance.

Step 1.
Track your expenses.

Keep track of all your expenses for one to two months to get an idea of what you currently typically spend for you and your family.

Hint: Making purchases on a single card or through the cash envelope system will help you keep purchases and payments in a single location so that you do not have to hunt down the record of purchases in numerous locations. 

Options for tracking: There are apps available or you can use a standard spreadsheet on paper or the computer. The system does not need to be fancy or complicated. 

Step 2.
Categorize your purchases.

Think about what categories your spending falls into, such as:
  • food,
  • gas,
  • utilities,
  • rent/mortgage,
  • large purchases, etc.
If you designate a miscellaneous category, try to minimize this by making more categories for your spending rather than lumping everything into a miscellaneous category.

Step 3.
Analyze your spending habits.

Once you have completed tracking for one to two months, evaluate your patterns of spending. Compare your spending habits to your total monthly income to get a complete picture of your budget. Include all sources of income so you have a clear and accurate picture of exactly where you stand with both income and spending. 

Step 4.
Determine how to cut expenses.

This is where the real work starts!

If you have not been able to save money, or not saved as much as you wanted to, your budget needs to be cut back on the expenses you listed during the last several months.

This phase in the process can be challenging and you may feel frustrated. DON'T GIVE UP! You can get through this step and be successful!

Examples of how to cut back:
  • You pay a high cable bill but rarely watch any shows on cable TV.  Consider removing that expense and just using services like Netflix or Hulu to save money.
  • Electric bill is high, make a diligent effort to turn off lights when not in the room or unplugging appliances that are not in use, and shut down your computers at night.
Small efforts can provide big rewards!


  • There are apps available that can help you find ways to cut unnecessary expenses.
  • There are apps that can help you identify subscriptions (such as Trim and Truebill) that you are paying for but not using, so that you may cancel those subscriptions.
  • Apps can also send you spending alerts so that you know when you are getting close to overspending.  
  • Small amounts cut regularly from your spending can add up to big rewards. 

Budget questions

Why should I make a budget?

A budget allows you to determine where your money should and does go each month.

It is a way of keeping you accountable  for your spending and shifts your focus to the longer term.

The best way to save money for debt payoff, major life events, or for retirement is to learn how to budget.

What are the reasons you want to make a budget?
  • Are you living paycheck to paycheck and panic every time something comes up out of the ordinary?
  • Do you want to stay home and oversee your household and take care of your children?
  • Do you want to retire early and get out of the working world to enjoy more personal freedom and activity?
Whatever the reason for creating a budget, keep in mind that your driving force is what will keep you going through tough times.  Things WILL get tough and you want your resolve to be tougher than the situation. 

What are some different ways of budgeting?

  • Electronic budgeting, such as  a spreadsheet,
  • Using an app:
    • Every Dollar,
    • Mint,
    • YNAB (You need a budget),
  • Paper and pen,
  • Cash envelope system,
  • The 50/30/20 System:
    • 50%: food, shelter, clothing,
    • 30% wants,
    • 20% debt repayment or savings.

Why should I stick with it?

Considering a budget is an amazing first step.  Feel proud of yourself.  If you don't evaluate your finances you have no idea how bad off they really are.

Yes... budgeting can  mean cutting back on certain things.  Don't think about what you are losing, think about what you are gaining in the long run.

Reasons to keep moving forward:
  • buying a home,
  • having a baby,
  • paying for college,
  • getting out of debt,
  • taking a dream vacation,
  • buying a car,
  • remodeling a home,
  • having money for unexpected expenses or emergencies.

Move forward as if your life depended on it.