Person paying bills online.

Have you ever thought about where your money really goes each month? If not, you may be surprised to find how much you are spending on unnecessary items. Instead, that money could be going into a savings account for emergencies or to help you make larger purchases that you may need. To make sure you are not overspending, wasting money on purchases you don't need, or simply knowing where your money goes, keep track of what you spend and create a budget. 

Keeping track of what you spend may sound simple, but did you remember to include that candy bar that you bought Tuesday on a whim? How about the extra toy your child put in the cart at the grocery store? There are digital tools to take the guesswork out of trying to remember where all of your money goes. With these, you can get your complete financial picture by adding investments, loans, credit cards, and bank accounts from various banking institutions all in one place. These digital tools will then total everything up and show you categories of where you spend your money. You may be shocked to see how quickly eating out adds up! 

After seeing where you spend your money, is that where you want it going? Could you save more efficiently? If so, it's time to create a budget and stick to it! A budget will help you cut back in places and help you pay down debt or save more for the future. 

Steps to budgeting: 

  1. Set Realistic Goals: Think of what is important to you, and where you want to be financially in a given time frame. For example, do you want to buy a new home for your family, live without money worries, take a vacation? If so, your goal may be to save a certain amount for a down-payment, pay off credit cards, or save enough to be able to take off work and to pay for your trip. 
  2. Identify Needs Versus Wants: Can you live without it? For example, you need housing, gas and electricity, transportation, food, and insurance. These are typically reoccurring expenses that take up a large amount of your paycheck. Wants are items that are purchased for fun, leisure, or comfort, but you do not NEED them. Traveling, designer clothing, and eating out would fall into your wants category. 
  3. Design your Budget: Make sure you are not spending more than you make. Start by listing the expenses of your monthly needs. Then, if you are going to be meeting your goals in the time frames you set, how much is left over for the wants categories? There are many tools and apps that can help you with your budget, or you can use a manual budgeting worksheet like this one by America Saves. 
  4. Stick to It: Watch your spending and check your finances regularly to make sure you are on track to meet the budgeting goals you set for yourself. 
*As an America Saves Week participating organization the linked items are the ways Dieterich Bank can help you save automatically. America Saves is not affiliated with nor endorses any specific financial institution or their products.