4 Steps to a Reliable Budget

By
Windus Fernandez Brinkkord, AIF®, CEPA
February 22, 2018
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You just realized you need a budget. Whether it's because you'd like to be saving more money, you plan on investing in a retirement plan, or you want to straighten out your current finances, you know that having a reliable budget would make your life easier.

Creating a budget for the first time can be one of the most overwhelming experiences, especially when you're just starting to look critically at your financial situation.

Take a deep breath and don't stress out! There are just a few simple steps that you can take to reach a reliable, stable budget. I have some excellent pieces of advice that I give to all my clients, family members, friends, and even neighbors. Let me guide you on this financial journey.

Ready to get started?

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Step One: Track all of your expenses

The first step to getting figuring out your finances is to figure out what you have been spending. Print your bank statements for the last three months and categorize each item in your statement on to a new spreadsheet. The Federal Trade Commission has a convenient website www.consumer.gov suggests categorizing every expense, including:

  • Car Expenses
  • Food
  • Clothing Expenses
  • Insurance
  • Credit Card Payments
  • Misc. Expenses
  • Entertainment/Going Out
  • School/Business Expense

Once you have your spending history, review your daily, weekly, and monthly expenses. Looking at the big picture and the tiny details all in one place can help you make small changes that have significant impacts on your finances. Reviewing all of this information lets you easily formulate your budget for next month without the hassle of digging through your bank statements.

Step Two: Set realistic goals

Start with a small, short-term goal. Set one finance goal to obtain over three months and use smaller milestones to meet the finish line you set for yourself. Use each week to reassess your goal and make adjustments as needed. When the goal is achieved, make another, and another, and another. Goals may require modifications, but it's an excellent way to set yourself up for financial success. You'll have something to be proud of every time you pass a milestone. And when the goal is reached? Reward yourself with something—that's still in your budget, of course.

Step Three: Make adjustments

I can't stress this enough—once the budget is set, don't be afraid to readjust as needed. There is no shame in making necessary changes to your budget. Situations change all the time, and nothing has to be concrete. Flexibility is key. Being rigid can make things harder for you and your family if something unexpected comes up and you need to spend more in one category than previously thought. Adjust smartly, not just because you want to splurge on a new gadget or pair of shoes.

Step Four: Never stop reviewing your budget

As I said in step three, adjustments are necessary. While you should remain flexible, if you notice that month after month, week after week, your budget seems to need changes, it's time to review. Reviewing your budget monthly will put your mind at ease if everything is going according to plan or allow you to see what hiccups caused you to veer off-course. Remember, no budget is perfect, and we all have to work towards a happy, balanced budget.

This is just a beginner's toolkit that can help you keep your budget in good health. These are my starting points that seeks to help you get to your financial happy place. There's no need to stress anymore. You don’t have to be perfect. I’ve seen too many people give up on budgeting because they made one mistake and got mad at themselves.  Give yourself the grace to be human.  As long as you are making more good decisions than bad ones over a long period of time, you can work towards getting to where get to where you want to be. You have a roadmap, and you can make your finances a priority quickly with just four simple steps.

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By
Jeff Motske, CFP®
November 26, 2018

Money is a commonly held taboo topic, like politics and religion. We just don’t feel comfortable talking about them – especially to people we care about. That’s because these topics are tied closely to how we view ourselves. These topics also garner a lot of judgment, and the last thing we want is to be judged on something that we feel is intrinsically linked to our intelligence or sense of maturity. Yet, by practicing a few simple tips, we can start tackling the taboo topic of family finances and get on that path to financial independence.

Be Honest

It is human nature to want to hide things we may not be proud of or want to avoid. Perhaps you charged a bit too much to your credit cards or haven’t saved as much as you planned for all of your family’s goals. You may want to avoid addressing such issues, but those who are part of your financial household need to know the honest, unvarnished state of your finances. Trying to hide the facts will just compound your issues when they come to light – and they will.

Be Frequent

Don’t just talk about money when money is a problem. That’s when stress levels are high and emotions are frayed. What needs to be a level-headed discussion can quickly escalate into an emotional shouting match. Instead, conversations about finances should become routine. If you schedule a monthly financial date night with your spouse, the frequent exposure will minimize the surprise and anxiety from these talks. Ultimately, there will be fewer surprises and more planning to help when unexpected or hard decisions need to be made.

Be Open to Feedback

You and your spouse are a team. Teams succeed by working together towards the same goals. Teammates, though, don’t always see things the same way and may have different approaches to the same objective. That’s why it’s important to get your spouse’s input on how your finances are being managed. Not only does your spouse’s input ensure you’re working towards the same goals, but different perspectives can also provide multiple solutions to financial issues. Most importantly, your spouse feels heard and validated, which is a precious thing to give to the one you love.

Be Non-Judgmental

What causes many to shy away from discussing finances is the idea that they will be judged for things they did or did not do with their money. Did you mismanage your funds and refrain from saving sufficiently? Were you too risky with your investments or not risky enough to provide for the household? To avoid the judgment, most will just avoid talking about their finances all together, which doesn’t often have good outcomes. Avoidance doesn’t help financial situations – it often just prolongs the mess. To help your spouse open up, it is beneficial to allow them to speak openly and freely and to listen without judgment.

I do believe that it is imperative to take the taboo out of talking about money with your spouse. Both of you should foster frequent and honest financial discussions, free of strife and judgment. Doing these things will allow you to solidify yourselves as a strong financial team and set you on your path for collective financial independence.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

By
David McDonough
October 9, 2023

In the heart of a bustling town, Ernesto “Peanut” Folks stood as the owner of an auto body repair shop, where years of hard work and dedication had woven into the very fabric of his business. His vision for the future was crystal clear—passing the torch and the legacy of his shop to his son, Ernesto. This is the remarkable story of how life insurance, often overlooked, can emerge as a beacon of hope and resilience when we need it most.

Ernesto “Peanut” Folks was the proud owner of an auto body repair shop, and his plan was to one day pass along the business to his son, Ernesto. Life insurance was never on Peanut’s radar until an insurance professional spoke to him about how it could help him protect the business and its 10 employees.

Downturns in the business would sometimes make it hard for Peanut to make his premium payment. He considered dropping the policy but ultimately kept it in place.

When Peanut was diagnosed with advanced-stage lung cancer, his doctors gave him just six months to live. The treatments that followed kept him away from work, and medical bills mounted.

Given his terminal diagnosis, a provision in his life insurance policy called an accelerated death benefit allowed him to access a portion of the money from that policy while he was still alive. In the months before his death at age 49, Peanut was able to pay off his debts and turn the body shop over to Ernesto, fulfilling his dream.

Talk to an insurance professional about how life insurance can protect your business and your legacy.

Download this comprehensive blog as a concise one-page here: Life Insurance Keeps a Business in the Family

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