Dream Big, Budget Smart: Budgeting Made Easy

Wouldn’t it be nice to buy what you want without limitations? The dream of having unlimited resources is alluring to all of us. Having a budget can seem like it gets in the way of that dream, but the reality is that budgeting can get us to the financial freedom we desire. 

There are many factors that can make budgeting difficult, or make it feel like a loss of fun and enjoyment with your hard-earned money —  but it’s not. 

Here are the main variables that contribute to a good budget:

1. Know your Take Home Pay: A major component of budgeting is accurately identifying what finances you have to operate with. It’s important to focus on income after taxes, retirement deductions, etc. to understand how much you have available each month for bills and spending. For example, if your total income is $4,200 per month after taxes and deductions, that can look like $3,125 take home pay. This smaller amount is what is in your budget for savings, bills, debts, etc. 
2. Expenses: Identify all monthly expenses. List them out thoroughly. Include housing, food, transportation, utilities, debt payments, healthcare, insurance, savings, etc. Identify which expenses are unable to be changed and those that can vary.
3. Identify the Differences between Necessities and Luxuries: We live in a time when luxuries are often seen as necessities, causing our budget to be difficult to maintain. Think about the giant 55-inch televisions in most homes, daily coffee runs, streaming service after streaming service — all often treated like essentials. Clever advertising further convinces us that we need the latest product to improve our lives. None of these purchases are necessary for basic survival. 
4. Identify Goals: 
   a. Short-term financial goals include purchases or plans you want to accomplish within five years. For example, you may want to buy a new couch in the next few months or increase your credit score. These short-term financial plans directly impact on budgeting choices made in the immediate future.
   b. Long-term financial goals extend beyond five years. Some examples include retirement planning, paying off major debts, or homeownership. These long-term financial goals allow us to structure our future 
   c. Without a clear direction, it is almost impossible to control your finances. Planning for the future and preparing for unexpected expenses can help protect us from the constantly changing environment we live in — and give us the power to drive our outcomes. 
5. Include “Fun Money”: Always include the things you enjoy in your budget. Taking control of this aspect of your money protects your financial future. This component of your budget includes entertainment, leisure, and even luxuries. Be realistic and leave room for unexpected costs. The key is to operate within the limits you set. Rather than feeling like money just seems to drift away each month, this will put the power of your funds back into your hands. A good budget must include the things you enjoy, or else it will most likely not be followed. 
6. Be Flexible. A good budget is a living document that often requires several revisions over time. Trial and error are normal. If you feel overwhelmed by mistakes that occur, know that mistakes are normal, and you do not have to walk this journey alone. 

In a culture that celebrates wealth, budgeting can seem like a dirty word. Instead of a threat to enjoyment, your budget is a secret weapon in the fight to achieve wealth and financial success.

If you’re struggling to manage your finances or create a sustainable budget, feel free to reach out to us for assistance! We’re happy to support your financial goals.

Email us at info@unioneap.com or call at 1 (855) 500-1915 anytime.

In Solidarity, 

Dr. Calvina Ellerbe

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