Ideas & Insights

Revamp Your Budget

Banking Education 4/29/2020 8:19:36 AM

Maintaining a healthy budget is essential for a successful financial life, and it is never too late to take a fresh look at your current spending and saving habits. Sunflower Bank is here to help you create possibilities with your budget (no matter the size) and we’ve prepared a few tips to help you on your way.

Track income and expenses.

The number one thing that financially successful people do: They spend less than they earn.

But if you aren’t sure of exactly what you’re earning versus what you’re spending, you won’t have a clue where you stand. So, the first step is to track everything. You can use online software, you can use a spreadsheet, or you can just buy a small spiral notebook and write everything down. Keep track of every dollar that comes IN and every dollar that goes OUT for at least one month. It’s easy to do and it’s critical as a starting point.

Plan ahead to avoid surprises.

Once you track your income and expenses, you’ll have a clearer idea of the money that’s coming in and going out of your household every month. You may notice patterns, and you may be able to use our emergency fund calculator to estimate the amount of reserves you should try to save (usually about 3 months of essential expenses). Do you know that your insurance premium is due every 6 months? Do you anticipate a large expense around holiday time? If you can look ahead to bigger ticket items, it’s easier to save a little bit each month, rather than all at once. Use some of our calculators to assist in planning and goal-setting.

Be honest about wants and needs.

As you move through your plan, being totally honest about what you want versus what you need is important. The best way to save money is to not spend it in the first place. Is eating out a want or need? Is a new gadget/new clothing item/new toy for your children critical to survival or can you do without it? Do you need that resort vacation or can you make meaningful experiences for your family with some low-cost travel plans? Identify the expenses that are not crucial to survival and reduce or eliminate them. It can be empowering to learn what you can live without.

There’s a budgeting tool for everyone.

Let’s say your goal was to run a marathon this year, but you had never run more than five minutes in your entire life. Wouldn’t your training plan would look different from someone who has completed a half-marathon? There’s a budgeting tool for all types of needs, and there’s a good chance that if you look around you’ll find one you like. From very basic savings to complex investments, there are many financial resources available online at various prices (many of them free). Ask friends what they use or do a simple internet search stating your financial goal. Use the software that works for you and fits with your own style.

For more ideas on how to update your current budget and take control of your finances, check out our Essential Financial Tips or talk to your local banker. Sunflower Bank has locations across the country and we are more than happy to help.