Like calorie counting, a personal budget is often associated with sacrifice. But Neale Godfrey, a AAA member and author of 27 books on financial literacy, puts a positive spin on it.
She says a personal budget is how you identify what you want and how to afford it. Without one, you’re basically driving down the road without a destination.
Godfrey suggests crafting a weekly budget to start.
First, record your weekly income after deductions. Then create a weekly breakdown of your regular monthly expenses such as rent, utilities and insurance.
As the week goes by, log all your spending, Godfrey said.
“At the end of the week, take a long, hard look at what you’re buying and decide if those purchases are enhancing your life or if you would like that money to go someplace else,” Godfrey said, like paying off credit card debt or saving for a vacation.
You can keep your budget low-tech and sketch it on paper or try a high-tech app to help you track your expenses. Here are a few.
This free app helps users track spending and set savings goals. It has a receipt scan function that makes inputting expenses easier.
Also free, Mint compiles data from a user’s bank, credit card and investment accounts in one location. Tap the trends tab for a snapshot of your spending during a period.
Set monthly spending limits by stuffing digital envelopes with virtual cash. Its reports section provides a pie chart and bar graph to illustrate your spending habits.
AAA saves you time, money and worry: Skip the bank line, earn generous interest on your savings and know your money is in trusted hands with the AAA Deposit Program.