Financial Advice

Manage Your Finances

TOPICS

Control Spending


KXAN's Studio 512 welcomed UFCU Financial Health Program Manager Monica Muñoz Andry to talk about spending. UFCU is passionate about helping you achieve your dreams, and Studio 512 is proud to have financial experts from UFCU join their Simple Health team.

In today’s tough economy, a budget is even more important tool to monitor your spending. Monica, what is your best advice when it comes to a budget?

The reason to create a budget is not to restrict all non-essential spending, but to see if there is opportunity to move money around in order to reach your goals. Depending on your goals, you might move money into a savings account or pay extra on a debt.

Advice to Create a Budget

  • Choose a short term goal
  • Eliminate guessing
  • Gather two months of statements
  • Base your budget on actual spending

When starting a budget, the most important thing is accuracy. We all do some mental accounting, and rounding, but most of us under- or overestimate the money coming in or going out. The best approach is to review your last two months of statements to determine where every dollar went. Then, you can identify where you want to spend less, and move some of that to areas where you should be spending – or saving – more, based on your true spending habits.

Once someone has created a budget, when and what changes should they implement first?

Advice to Refine a Budget

  • Shop for the best rates and deals
  • Cut spending on things you don't use

Change is more effective in steps instead of all at once. We also recommend you call your service providers/creditors to ensure you’re getting the best rates and deals. It never hurts to ask, and you’d be surprised at the positive impact a simple phone call can make. Another place to start is reviewing your budget for the things you need or enjoy. If you find that a lot of your spending went to items or services that you didn’t really use, need, or enjoy, then why not cut those things from your budget?

So, this sounds simple enough, but in reality, we’ve all been there – what is the best way to stick to a budget?

What we focus on intentionally gets the best results. Every week, find a way to stop and really ask yourself, “What can I do to stay on track and reach my goals?”

Advice to Stick to a Budget

  • Set realistic goals for your lifestyle
  • Ask, "What will help me reach my goal?"
  • Decide, prioritize, and take action

Also, your budget is for your lifestyle, and you want it to set you up for success. For example, if you don’t like to cook, don’t cut down your eating-out budget to zero and vow to cook five days a week. Instead, start small and go from there. Maybe you start by eating in twice a week versus five days a week. Or instead of buying a loved one a gift, you give them a homemade gift or the gift of spending time with them.

The good news is, whatever happens during that week or month, each payday is a new opportunity to take action towards reaching your financial goals.