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Creating a Budget and Sticking to It

Looking to get serious about saving? Then creating a budget should be your first step. After all, how can you save if you don’t know where all of your money is going?

Check out these six steps, courtesy of Better Money Habits, to help get you started.

Step 1: Start with your net income

Your net income is your actual take-home pay, after deductions for taxes, Social Security, 401(k) contributions, and any other deductions that are taken out. This is the number you should use when creating your budget.

Step 2: Track your spending

And we mean everything. From your rent or mortgage payment, to your morning coffee, to the amount you spend on gas for your car each month. Until you identify what you are spending the most money on, you won’t be able to know where you can (and probably should) cut back to save.

First start with your fixed expenses, like your rent, mortgage or car payments. It’s unlikely you’ll be able to cut back on these, but it will help put your budget in perspective to know how much of your monthly income goes toward these expenses. >> America Saves has created a simple budget worksheet that you can use to keep track of your monthly spending and expenses.

Then, list your variable expenses—those expenses that may change from month to month like groceries, gas, clothing and entertainment. Your variable expenses are where you will find the most opportunities to cut back. Check your bank and credit card statement to help with this as many banks now itemize and breakdown your monthly expenditures by category for you.

Step 3: Set your goals

Do you want to pay down debt and/or pay off a credit card or two? Do you want to start saving or save more for an emergency fund or retirement? Setting savings and debt reduction goals will help give you an end-point to work towards. Taking the America Saves Pledge is a good place to start. When you take the pledge and choose your savings goal, you will receive tips, motivation and advice on how to reach your goal. You can even opt-in to receive text messages, reminding you to save.

Step 4: Make a plan

Your plan will include not only your savings goals, but how you will save (we recommend saving automatically), and ways you can spend less and save towards your goal. If you drive to work every day and pay for parking, maybe you can take the bus some days instead. Are you eating out two-three times per week? Perhaps you can cut that back to once, or even once every other week. How you will save will depend on how much you are willing to sacrifice and how quickly you want to reach your savings goal(s).

Step 5: Adjust your habits if necessary

Once you have completed all these steps, you have everything you need to complete your budget. Keep in mind that this may be a big change in the way you are used to managing your finances, and it may take some sacrifices to achieve your goals, but once you do it will be worth it. 

Step 6: Keep checking in

Review your budget on a regular basis to make sure you are staying on track. You might get a large tax refund that will help you pay down some debt sooner or reach your emergency fund goal. You may get a salary increase or decrease if you change jobs. Be sure to make adjustments in your budget accordingly to keep yourself on track.


Are you trying to save money? Let America Saves help you reach your savings and debt reduction goals. It all starts when you make a commitment to yourself to save. Take the first step today and take the America Saves pledge to save money, reduce debt, and build wealth over time. And it doesn’t stop there. America Saves will keep you motivated with information, advice, tips, and reminders to help you reach your savings goal. Think of us as your own personal support system.

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Better Money Habits outlines 6 easy steps to get you started on creating a budget and how to stick to it >> http://bit.ly/2zJmNdJ 

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    #Taxrefunds (incl. EITC + ACTC) are NOT considered income for those w/public benefits. @RealEconImpact

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