Editor’s Note: From time to time we like to invite local experts from the community to answer questions about parenting and raising kids in Huntsville and North Alabama on a budget. Today we asked Beth Richardson, Madison Market President with Progress Bank, to address questions about the creating a family budget you can stick to all year long.
Q.) How can I create a realistic plan to help me budget through the year?
Having a realistic budget for the coming year starts with letting go of all budgeting myths such as, not having time to budget, budgeting is difficult math or my personal favorite, that your budget is in your head. A budget in your head isn’t a budget. It’s just a kinda sorta or vague idea of what you’re spending. Everyone needs a written plan for when and how they will spend their money; a budget. It’s a great way to hold yourself accountable and to track your progress.
Now that we’ve freed our minds of budgeting myths. The next step is sitting down with your spouse or accountability partner and be intentional about where you will spend your money and how you will earn income for the coming year. Since everyone is still in the holiday spirit, decide now how much money to spend on gifts next year. Divide that number by 12 and start setting aside that amount each month. This number becomes part of your budget for next year.
The planning for a realistic budget in 2022 starts now.
What do you want to accomplish with your money in the last year? Setting the right goals will keep you motivated and excited about the future. It also reminds you how your money goals are just as important as the goals you have for your career, relationships, and health/fitness. Think about short term and long term goals you desire to accomplish. Aside from your monthly expenses, are there vacations you will take? When will you take them? What will they cost? Do you want new appliances by Memorial Day? Do the children need new sport equipment? Are you putting enough in a retirement plan or a college savings account? Wouldn’t it feel great to have four to six months of expenses in a savings? The planning is critical in creating a realistic budget.
Once the budget is created, you and your spouse or accountability partner will need to have a budget meeting every month to make any necessary adjustments and celebrate successes.
With the right plan, you can take control of your money, beat debt, and change your future in 2021.
Q.) I need some better systems in place. Are there any tools or apps you can recommend to help me manage my budget?
Mint – Once you’ve entered basic information such as banking, credit and investment accounts, Mint automatically begins to track your money. It updates and categorizes transactions, creating a picture of spending in real time. You can add your own categories, pay bills, and set budgets.
YNAB (You need a Budget) – offers free workshops on mastering the art of budgeting and provides tools and resources that are helpful in the budgeting process.
EveryDollar – creates unlimited budgets, track transactions against your budget, connect to your bank accounts, and has free email support.
Spreadsheet – This is free if you already have Microsoft Excel installed on your computer. Microsoft provides several simple budget templates, and if you’re familiar with Excel, they’re easy to use. Maintaining a spreadsheet budget does require more time than some of the other options, but many experts believe the extra effort helps you have a better understanding of your money, which makes it easier to develop better habits.
Dave Ramsey’s Envelope System – Once you’ve created your budget categories and targeted amounts, you label your envelopes and fill them with the appropriate amount of cash. The benefit is that you aren’t using credit cards, but cash which makes it difficult to go over budget.
ABOUT THE AUTHOR: Beth B. Richardson is the Madison Market President with Progress Bank with over 17 years of experience in retail and commercial banking. She has earned the designation of David Ramsey Financial Coach, where she enjoys helping families experience financial freedom through budgeting, becoming debt free, building wealth and leaving a legacy. Born and raised in Tuskegee, Beth graduated from Tuskegee Institute High School and attended Tuskegee University. She is happily married to Rodney, Principal of Horizon Elementary School and has one daughter, Jaylin who attends James Clemens HS. She enjoys reading, running, and spending quality time with family. Beth is active member of First Missionary Baptist Church, where she teaches Adult Sunday School class. Drawing from her years of experience, she can provide professional guidance for your family’s needs for budgeting, savings, investments, retirement, and much more.
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As a hyper-local website focused on all aspects of parenting in and around Huntsville, AL, and the Tennessee Valley, Rocket City Mom occasionally asks local parents to submit their stories for publication. This is part of our continual effort to represent varied viewpoints and experiences on our site. However, these articles should not be seen as necessarily expressing the views of Rocket City Mom Media Group, LLC.