Many financial planning experts advise that the first step to creating a personal budget is to keep a "spending diary" for a week or month to carefully track "where" your money is going. Relying on a weekly or monthly budget will allow you to gain control of your spending, and hopefully prepare you to save a portion of your assets for future expenses.
There are many free budgeting tools available on the Internet. Here are a few examples:
Financial Education: General Resources
- MyMoney.gov The official U.S. government website for financial literacy
- Money Smart Kansas City Website for Money Smart Month, Kansas City's annual financial literacy education event
- Financial Basics From SaveAndInvest.org, includes tools and resources to help you start saving and planning, including a link to an Action Plan to track your spending
- Mint.com An online personal finance tool; has free mobile apps
- Get More Money Now Includes information about financial goal setting- an important step toward better money management, and information about credit and investing
- Money Management International Articles and other financial education resources
- American Financial Services Association-Education Foundation Resources to help high school students with responsible money management
- Determining how fast your savings will grow Use this form to compute how much your savings will grow based on the initial amount, interest, and taxes
- How fast you can pay off your credit card? Use this online credit card calculator to find out!
- A Teen's Guide to Economics and Saving Money Helpful links for teens on banking, budgeting, and saving
- Consumer's Guide to Credit Cards Learn how to properly use a credit card
- How to Establish, Use, and Protect Credit Learn how to establish and use credit
- Your Free Credit Reports Learn about your free credit reports
- Understanding and Improving Your Credit Score Learn how to improve your credit score
Many financial planners also believe that "living within your means" boils down to one thing: Self-discipline. Reaching financial goals requires self-control, and understanding the difference between wants and needs. Your first step is to determine your financial goals.
When creating a budget, be sure to include
- Fixed expenses: Expenses in which the amount does not change (such as monthly rent)
- Variable expenses: Expenses in which the actual amount fluctuates from time to time (your electric bill)
- Optional expenses: For things like dining out and entertainment
Easy day-to-day tips for saving money:
From InnerLight Incorporated (Kansas City, MO)
- Clip coupons only for staples (butter, hot dogs, bread, etc.)- many grocery coupons are for new high-priced items, so coupons will not really "save" you money- they will just bring these items down to regular price.
- Read and use merchant sales flyers.
- Buy whole rather than cut foods (meats, fruits, and vegetables).
- Pack a lunch for work.
- Engage in inexpensive forms of exercise that do not require a gym membership (jogging, biking, free weights).
From Consumer Federation of America, "66 Ways to Save Money" (Washington, DC)
- Buy generic products.
- Pay bills ON TIME (to avoid interest payments).
- Don't pay retail for anything—watch for sales, and ask merchants, "Is that your best price?"
- When buying a used car, compare the asking price with the "Bluebook" price, or the price found in a reputable pricing guide (available at the Library).
- Find and use an automotive mechanic who is honest, well-established, and communicates well about repairs.
- Use a free checking account from a bank which does not charge extraneous fees.
- Open a savings account at a bank that does not charge extraneous fees and earns the highest interest possible.
- Use a cell phone plan which saves you the most money based on your calling habits.
- Cook! Prepared foods are more expensive than ingredients.
- Pay attention to quantities on food labels; shop for the lowest price per unit weight.
- Ask your physician about generic prescription drugs, and call several pharmacies to compare prices for prescription drugs.
For additional information, look over these books available at Kansas City Public Library; you can find more books by searching the Library's catalog under the subject headings "Saving and investment," "Budgets, Personal," and "Finance, Personal."
The Debt-Free Spending Plan: An Amazingly Simple Way to Take Control of Your Finances Once and for All. 2013. Call number: 332.024 N14D 2013
The Smartest Money Book You'll Ever Read: Everything You Need to Know About Growing, Spending, and Enjoying Your Money. 2013. Call number: 332.024 S68SM 2013
Digital Smarts: How to Stay Within a Budget When Shopping, Living, and Doing Business Online. 2013. Call number: 332.024 P4853D 2013