Financial Planning Basics: Creating and Maintaining a Budget

Whether you're earning a six-figure salary or just starting your career after college many individuals believe that budgeting is crucial. In today's environment having a budget that you adhere to can help control your spending boost your savings, aid, in planning for retirement or other future aspirations and manage debt effectively.

Creating the budget itself is often the easy part; however, sticking to it can pose a challenge. To stay committed to your plan try shifting your perspective on budgeting and view it as a tool for achieving your financial objectives.

So how can you establish a budget that serves you well in the months and years? Here are some suggestions;

Customize It

You don't have to settle for the categories provided by budget templates. If dining out brings you joy than traveling consider adding dining out as a category. If your preferences change over time feel free to modify or add categories that align with your lifestyle.

Factor in Unexpected and Infrequent Expenses

While you may keep track of expenses, like bills, clothing purchases or entertainment costs unforeseen expenses could throw off your budget if not accounted for adequately.Unexpected expenses, like a visit to the vet unexpected school costs or needing to replace a vehicle can catch us off guard. It's important to factor these possibilities into your budget planning.

Consider Realistic Income Estimates

When creating your budget focus on including the income you know you will receive or can reasonably expect. Avoid relying on bonuses, commissions or income from gigs that haven't materialized yet. Stick to what you're earning.

Track Your Expenses

At the end of each month take some time to compare your expenses with what you budgeted for. If you come in under budget that's fantastic! If not look for ways to adjust your spending habits or revisit your budget allocations.

Regularly Review and Adjust

like life itself is ever changing so should be your budget. Regularly review it to ensure it aligns with your circumstances, goals and lifestyle preferences. Stay flexible. Don't hesitate to make changes by adding categories removing unnecessary ones or adjusting allocated amounts as needed.

_{About the author:}

_{Paul Carriere CFP® provides fee-only financial planning and investment management services in Colorado Springs, Co. Carriere Financial Planning serves clients as a fiduciary and never earns a commission of any kind. Paul has over 9 years of experience as a financial advisor in Colorado Springs.} 

_{* This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2023 Advisor Websites.}