Money Matters: Tips for Creating a Realistic Budget
Celebrating National Financial Literacy Month with tips you can use
April is National Financial Literacy Month and The Equity Alliance is focused on educating and empowering communities of color in Nashville to become more civically engaged in the political process as a means of ensuring more equitable economic, social, and political outcomes. When it comes to important money matters, we want to give you some helpful weekly personal financial tips to put you on a path to financial independence. This week is about Creating a Realistic Budget. Here’s how:
- Make a plan for your money.
A budget is simply a monthly plan that tells your money where to go. The formula should be this: Income minus Expenses equals Zero
(Income) – (Expenses) = $0.00
Assign every dollar to a category. Major categories include Housing/Rent, Food, Transportation, Entertainment, Emergency Fund, and Debt/Loans
- Write down all of your bills and expenses for the month.
You have to see it, and your expenses have to match what you actually spend. How can you ever assess how well you’re doing financially if you have no idea how you’re actually doing. You’d be surprised where your money goes once you actually write down every expense, especially when it comes to entertainment and eating out. If you have children, factor in things such as birthday parties, summer clothes, doctor visits, and school field trips.
- Pay yourself first.
Make a habit to build your $1,000 emergency fund for unexpected expenses. You can even have a set amount automatically deducted from your paycheck and into your savings account.
- Execute the plan.
Use online and mobile resources like Mint.com, EveryDollar.com, Dave Ramsey’s Zero-Based Budgeting tools, or your bank’s online bill pay option to help you create a budget. Then, stick with it for at least 90 days to begin seeing your plan work.
- Don’t give up.
According to financial guru Dave Ramsey, personal finance is 80% behavior and 20% head knowledge. Of course, things come up. Impulse spending can be tempting. But be disciplined enough to keep at it.
Check back next week for more money matters tips from The Equity Alliance. Make plans to attend our Financial Empowerment Series presented by Regions Bank in partnership with Knowledge Bank Nashville, Clerisy Circle, Conscious Conversation, Urban Enterprise Group, and the Urban League of Middle Tennessee. The first seminar will be on Saturday, April 29, 2017 from 10 a.m. to 12 p.m. Check our website and Facebook page for updated details on this upcoming event.