Budgeting
Budgeting is a vital part of your financial future. Many adults don't understand the mechanics of budgeting and are usually unsuccessful when budgeting. At CCCS of South Texas we understand the challenges you face when learning to budget and maintaining your budget. We have free budgeting counseling available by appointment when you find yourself needing help with your budget. In the meantime, we've collected a variety of resources for you to help in your budgeting efforts.
Budget Resources:
The Budget Blueprint is a PDF document you can download to immediately start budgeting. It is a legal size, two sided handout created to walk you through the budget process. It determines your income, expenses, and has a handy goal section to keep you motivated.
The Daily Money Tracker is also available in PDF format for tracking your daily expenses. This handout creates a diary for your spending by category and day. The goal of the handout is to help you realistically examine your spending habits and help determine realistic starting points for your budget.
The links to the resoures above will be coming soon.
How to Avoid Costly Money Management Mistakes
Most people have had no formal money management education and generally learn from trial and error. There are some money management mistakes we can make that could put us into a financial tailspin. If at all possible we want to try and avoid these mistakes. Here are just a few common problems.
No budget or spending plan. Many people live paycheck to paycheck and never really know where their money goes. Take a critical look at your spending, develop a plan in relation to your financial goals, and live within your means.
No cash reserve. An emergency savings plan can give you peace of mind and security. Industry experts recommend anywhere from three to six months living expenses for the basics.
Using Credit too much. In many instances the biggest problem with credit is that families overextend themselves and become committed to large payments they can't afford. Know the terms of your credit accounts and figure what the use of that credit is in real terms of "actual cost". Keep track of expenditures with credit, so that when the bills come there is no surprise.
Non-constructive use of windfalls. Most families are inclined to spend the extra money on luxuries they wouldn't ordinarily consider. Raises, bonuses, or income tax refunds are great ways to start or add to your savings program. A sizeable windfall could also be used as an investment tool for future needs. Save half and spend half.
No provision for large expenses. These expenses occur throughout the year and can break a spending plan. Periodic savings can help safeguard your budget against these large ticket items causing problems in your spending plans and financial goals.
Underestimating the cost of ownership. The original cost is not always the cost of ownership. Many of the costs are obvious, but some get overlooked until they are a problem. An automobile is a perfect example. We have to figure all costs in the cost of ownership. Expenses like gas, oil, repairs, maintenance, tires, insurance, registration, license, parking and depreciation of value are real aspects of cost of ownership. When evaluating the cost of ownership for an item try not to take the emotional view but a realist view of every related expense.
Spending leaks. These are the "little things" that tend to add up quickly in our budget. These items can easily cause problems and add up to big trouble. Write down every cent for a month and take a look at where you can make changes. Take control of these trouble spots and you'll have more money for things you really want.
Careless shopping habits. It doesn't matter if it is grocery shopping or buying clothes we tend to overspend and buy without comparing prices. Before you buy, have a plan. Read labels and understand warranties and contracts.
Comparison shopping and being an informed consumer can help you with your plan as well as get the most for your money.
Can't wait attitude. Do you want it all or just to keep up with the Jones'? Young people are especially vulnerable to this mentality. Remember, there is a cost to having it now versus waiting. Your new slogan should be "save now and buy later".
