Setting Yourself Up for Financial Success
Budgeting can sometimes feel like a massive chore, but it’s an important tool to help you plan for the future and feel more in control of your life. We asked three local financial experts to offer their best budgeting tips to inspire you to ban the blues and stay on top of your finances.
Build Security
Budgets are crucial to prepare for emergencies, but they also help ensure you have money for big purchases as well as fun and everyday spending. Frenise Mann, financial advisor at Mann Financial Consulting, describes keeping track of your money as building a “Sound Financial House,” saying it “starts with a sure foundation, which encompasses utilizing a spending plan, keeping an up-to-date cash flow analysis, debt management, and asset/income protection.”
Reframing the task may make it easier to tackle. Mann explains, “Most people get stressed out about the very word ‘budget.’ I like to make it fun by changing the name to something they are trying to achieve with their financial goals or blueprint. For example, change ‘Budget’ to ‘Spending Plan’ or ‘Home Purchase Planning.’”
Make a Plan
Once you’ve settled on a name that doesn’t inspire dread, it’s time to choose a method. “There is no wrong way to budget,” Sarah Edgar, manager of the University of Tennessee at Chattanooga’s Financial Wellness & Outreach program says, “and don’t be afraid to change your budgeting style – if Excel is not working, try a mobile app or write your spending down on a calendar!” Having a workable cash flow plan is what matters, and “done is better than perfect,” Carrie Turcotte, financial planner at NorthShore Financial Strategies, reminds new budgeters.
A good place to start is by saving all of your receipts for a month so you can see exactly how much money you’re spending and where. Then separate your required spending – rent, utilities, and groceries – from your optional spending – entertainment, subscriptions, etc. You definitely want to build room in the budget for discretionary spending on fun things, Turcotte says, and explains that separating these two categories is important so that “if cash is low, you know what expenses you can eliminate.”
Set Goals and Check-ins
After you’ve examined what’s going on in the day-to-day, start thinking about the future. Set both long- and short-term goals, like a big vacation versus a small weekend trip, to help you stay focused and excited about saving, Turcotte advises. “If you’re not great at saving money,” Edgar adds, “try a fun savings challenge or set realistic goals like reducing your monthly discretionary spending.”
Schedule frequent check-ins to make sure your spending is in line with your goals. “Make budgeting convenient for your time – it does not have to take hours. I personally budget once a week for 10-15 minutes,” Edgar shares. Every so often, evaluate whether your habits still make sense, such as paying for subscription services you no longer use. Implementing regular mini budgeting sessions can eliminate the dread of budgeting and subsequent procrastination, ultimately giving you more control over your finances.
Frenise Mann, MBA, MSF, BFA
Financial Advisor, Mann Financial Consulting
Sarah Edgar, CFEI
Financial Wellness & Outreach Program Manager, University of Tennessee at Chattanooga
Carrie Turcotte, CFP, RICP
Financial Planner and Investment Strategist, NorthShore Financial Strategies
