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Building a Budget

Budgeting is about two main goals—staying in control and seeing the big picture. If your budget gives you the ability to accomplish these goals, then you’re getting the job done!

Budgeting Quick Tips

  • Create a budget to plan for how you want to spend and save your money to reach your goals.
  • Try journaling your day-to-day spending. Small expenses add up quickly.
  • Expect the unexpected. Emergency expenses are one of the biggest budget busters.
  • Use mobile banking to check your daily spending.

Set Budget Goals

To create a budget that really works, you have to start by knowing where you want to end up. Clear goals help you see end results clearly and specifically. Here’s an example:

  • Goal: Save at least $750 for holiday expenses.
  • Time Frame: 12 months until the holidays.
  • Plan: Cut back on lunches and dining out = $15 a week.
  • Result: $15 a week x 52 weeks = $780!

Set goals you can reach

Follow this goal-planning method to develop both short-term (reachable within one year) and long-term goals (reachable in more than a year):

  1. Write down each of your short- and long-term goals.
  2. Prioritize each goal.
  3. Determine the total cost of each goal.
  4. Determine when—in number of months—you would like to achieve each goal.
  5. Divide the cost by the number of months to determine how much you need to save each month to achieve the goals.

Goals as the focal point

As you develop your budget, keep your goals as your focal point. Seeing the connections between your spending and its effect on your goals will help you stay disciplined. Understanding the benefit of expense adjustments in relation to your goals will help you feel more positive. Seeing real progress toward the things that are truly important to you will keep you motivated.

Build a Budget

Building a budget doesn’t have to be complicated. Remember, a budget should be your plan for how you spend and save your money. If it helps you stay in control and see what’s on the horizon, it will get the job done!

When building your monthly budget, be sure to include these items:

Amount of income:

  • Include salary/wages, tips, Social Security, retirement, pension, benefits, etc.
  • Use take-home pay for planning purposes.

Amount of fixed amount expenses:

  • Payments that stay the same each month; could include rent, mortgage, car payment, insurance, etc.
  • Be mindful not to live outside your means.

Amount of variable expenses:

  • These payments may change month to month, based on use; could include gas, electric, food, cell phone, clothing, entertainment, etc.
  • Use cost comparison sites such as or to look for more cost efficient options.

Amount of periodic expenses:

  • These expenses do not occur monthly; could include vacations, insurance, back-to-school or holiday shopping.

Amount for savings goals:

  • Be sure to budget money to put toward your savings goals.
  • If you don’t have one already, budget money to build an emergency fund. This will help you cover those unexpected emergency expenses without busting your entire budget.

Once you’ve created your budget, read our article, “Sticking to a Budget” to learn how to keep on track.

Want more assistance in building a budget that works for you? Check out the resources available through our partner, Consumer Credit Counseling Service of Rochester.