Budgeting

A budget is a plan that helps you control your money. It’s okay if you haven’t had a budget in the past: Now is a great time to get started! And if you don’t like how you spend your money, you can make changes.

What’s a Budget?

A budget lets you understand and control how you get money, spend it, save it, invest it, and get rid of debt. Your budget can help you achieve your financial and personal goals.

To have a successful budget, you will have to track how you get your money and how you spend it. Here are some examples of things to track:

• Food
• Rent or mortgage
• Medical or disability expenses
• Going out with friends
• Savings for the future
• Income from Supplemental Security Income (SSI) benefits or Social Security Disability Insurance (SSDI)
• Income from work

Your budget will never be perfect. Instead, focus on the big income sources and expenses. Sometimes you will get money you didn’t expect or have to pay for things you didn’t know you’d need: That’s okay. Your budget helps you keep on track, but doesn’t cover everything. However, if your budget is usually wrong, you’ll need to adjust it.

Tracking Expenses

Any budget has to have two things: your income and your expenses. Here’s a strategy for your expenses: Keep all your receipts for 30 days and write down everything you spend, online and off, no matter how small. You can use paper and pencil, a spreadsheet, an app like Quicken, or any other personal finance management system. Use whatever works best for you.

If you really pay attention to detail during this month, you’ll learn a lot. You may be shocked at how much money you are spending, like how much you spend on your monthly phone bill, coffee shop visits, or eating out. Tracking your spending lets you think about what is actually most important to you. It gives you the chance to plan for your financial future based on your goals. You shouldn’t feel guilty if you’re spending too much, but instead work on making changes if you need to. Use this checklist to decide how to cut your expenses.

When you track your spending, put your expenses into categories, like savings, debt repayment, housing, food, clothing, transportation, health care, childcare, hobbies, gifts, entertainment, and so on. Your budget doesn’t have to be perfect and you can adjust it over time.

Tracking Income

For your income, do the same thing: for one month, every time you get money, write it down and keep a copy of your pay stub or benefits records. If you get money from other sources (like help from family), track that too. You need to know where the money comes from and be able to add it up and compare it to your expenses. It’s important for you to make sure that these are all reliable sources of money that you will get every month, because it needs to be enough for you to be able to pay your expenses.

Here are some simple worksheets you can use that can help you track how you get money and how you spend it:

• Bill calendar
• Spending tracker
• Monthly budget

Financial Education and Budgeting Resources

These programs can teach you more about managing your money and budgeting:

• The Benjamin Rose Institute on Aging has online financial education workshops on a variety of topics, including budgeting.
• The Neighborhood Housing Partnership of Greater Springfield offers in-person financial literacy workshops.
• The Northwestern Ohio Community Action Commission offers a series of financial literacy classes.
• Hands on Banking has tips on different money-related topics.
• MyMoney.gov presents five main building blocks for managing money and offers tools like calculators, worksheets, and checklists.
• OhioMeansJobs offers a budget calculator to help you see how you get and use your money.
• The World Institute on Disability offers an interactive online course on budgeting (free account registration required).