So You Need a Budget, Now What?

You might be grappling with how to tackle your student loans. You might be pondering how you can rock retirement. You might be aspiring to buy your first home. No matter your goals, you need to take control of your money before you can reach them. 

Accounting Professor Laura McNally recently taught alumni and friends how to take control of their finances through personal budgeting. 

1. Everyone needs a budget

Have you ever asked yourself, "where does all my money go?" Or "where am I going to get the money to pay for that?" Are you looking to move, change jobs, buy a home, or retire? A budget can help you achieve many of your financial goals. 

2. What is a budget?

A budget gets the bad reputation of being a control over your life and not letting you have any fun. A budget is actually just a check and balance of where your money is spent.

• A budget allows you financial freedom.
• A budget serves as a reminder of those bills that happen only once in a while and catch us off guard.
• A budget helps to save for that unexpected event or trip.

A budget can also serve as a check list and tool.

• A budget can be as detailed or limited as you like.
• A budget makes sure you don’t miss those monthly bills.
• A budget does not have to be a spreadsheet or computer program, it can be envelopes.

3. When should you prepare a budget?

Budgets can be prepared at any time but usually budgets are prepared at the beginning of the year so you have a road map for the year. Preparing a budget for a specific time period may help you to save for specific event. 

4. What time period should a budget cover?

Monthly budgets allow you to look at specific things that happen on a recurring basis. A daily budget may serve a useful purpose if you are concerned where your cash is going, but may be cumbersome to maintain – Envelope budgets can help with this.

5. Where are budgets prepared?

There are many software programs available to do detail budgeting

• Mvelopes 
• Quicken
• Money Dance
• LearnVest
• Personal Capital
• Mint
• CountAbout
• YNAB – You Need a Budget
• Acorns
• Excel Spreadsheet

6. Why should I prepare a budget?

As bill payments and check deposits get more and more automated we spend less time actually looking at a bank balance. A budget gives a snapshot of balances at any point in time.

• How many of you actually balanced your check book? (Checkbook what checkbook?)
• Do you know when your paycheck gets deposited into your bank?
• Do you go online and pay your bills or are they automatic?
• Are you bills consistently the same amount or fluctuate? (Utilities)
• What about credit cards and payments of those balances?
• Do you have several quarterly payments (insurance) that may be different amounts?

7. How do I prepare a budget?

Professor McNally created this simple budgeting spreadsheet you can use to prepare your very own budget. Complete the spreadsheet with your income, expenses, savings, and more to start taking control of your finances.