Six steps to budgeting

Let's face it, doing a household budget can be pretty dull. While there are more exciting things to do in life, a budget is still the best way for you to get a handle on ways to save money. Give our a try. It's fast and easy. And it will even help you spot areas where you can save some money.

If you're ready to roll up your sleeves and crunch some numbers, here are six steps to get you on your way.

1. Assess your financial resources

The first step is to calculate how much money you have coming in each month. This might be investment income, government assistance, student loans, employment income, disability benefits, retirement pensions or money from other sources.

2. Determine your expenses

Next you need to determine how you spend your money by reviewing your financial records. If your records aren't clear, consider keeping a financial diary to track your spending.

Be sure to separate the fixed expenses that you must meet (mortgage, rent, car payments, insurance) from variable expenses (food, clothing, entertainment, charitable gifts). Once you see your spending patterns, you may be able to make adjustments to certain expenses.

3. Set goals

Establish a list of the goals you wish to achieve. These can be long-term goals like purchasing property or funding your retirement. Or they can be short-term goals such as home improvements or car maintenance.

4. Create a plan

Once you've figured out how much money is coming in and where it's going, you can put together a plan that matches your goals with your financial situation.

5. Pay yourself first

When you pay yourself first you simply set aside a certain amount of money each month to go into an account that you will not touch. You can set up a separate savings account for infrequent but anticipated expenses, such as property taxes, vacations, automobile insurance or car maintenance. Our Jumpstart® is specially designed for these types of savings plans.

6. Track your progress

At the end of each month, you should re-evaluate your budget. Compare your actual expenses and income to your budget and make appropriate adjustments.

Once your budget is done, things are bound to change. They always do. So stay flexible. And remember, a budget is only a guideline. It doesn't factor in non-financial considerations that can result from drastic changes in spending habits.

To speak with an investment expert contact us at 604-877-7000 or toll-free at 1-888-Vancity (826-2489), visit your local branch or in your neighbourhood.

Jumpstart® is a registered trade-mark of Vancouver City Savings Credit Union