Chat
Loans By Phone: (800) 404-0254

Budgeting in 4 Easy Steps

budget
No matter your financial situation in life, everyone needs a budget. With a budget you can plan for needed expenses and prepare for the things you want. In fact, the most simple budget only needs a couple lists, a calculator, and some goals. Below are the the main points our post will go over to help you set up your budget:
 

 
Budgets are an important tool in anyone’s financial arsenal. Budgets can help you organize your needed expenses, like rent and bills, prepare for emergencies and get ready for whatever your future might hold. By knowing how to budget you can learn to stop living paycheck to paycheck and start building up your savings. it can help you save up for big expenses or future life events like a wedding, starting a family, buying a car or a house or moving to a new state.

Budgeting can also help you save for retirement, something else that even younger people just starting out on their own sometimes forget to think about but should. But most of all a it can grant you financial power and freedom and help you provide for your wants and needs. But for those just starting out on their own especially, it can be hard to know where to begin.

There are several key elements you’ll need to include in your budget. You need to think about all your necessary expenses and plan them out accordingly so you are aware of how much of your monthly income you need to spend each month no matter what. Then you’ll have to think about unnecessary expenses. This is where you have the most freedom to plan out the numbers and make adjustments.
budget-template

How to Budget

There are many ways to budget and there is a lot of advice out there in the financial spheres about how to do it. You can also choose to plan for certain events by making a specific wedding budget, or for major purchases like car payments. But if you’re making a simple budget for yourself, then the main thing you’ll want to decide first is whether you want to make a monthly or yearly budget. Most people like to create a yearly one to get a general big picture view of their financial goals and future plans. But, a monthly one is more helpful for everyday use. We’re going to try and condense all that down to the bare bones minimum of what every smart budget needs.

#1: List your monthly income

List out all your forms of income. This would include the paychecks from your job, but also any extra money you make from any of your side hustles. Here is also where you can decide whether you want to organize your finances for gross income or net income.

Gross income is simpler and easier to calculate. You just need to know how much you get paid and use that money for your calculations.

Net income isn’t as simple to figure out but there are advantages to using it. You figure out your net income by looking up what the income tax is in your state, and taking out that percentage from your gross income. Using net income instead of gross income is perhaps better because it more realistically reflects what you will actually receive from your paycheck.

#2: List your fixed expenses

After you have all your sources of income written down you’ll want to form another list for all your fixed expenses. Fixed expenses are the expenses you have each month that don’t fluctuate in amount. Everyone’s list is going to look different depending on what expenses do and don’t apply to you, but here is an example list of some fixed expenses:

  • Rent or Mortgage: A calculation you’ll want to do when looking at your housing expenses is to check that your total housing expenses aren’t over 28% of your monthly gross income.
  • Insurance
  • Debts: A calculation you’ll want to do when looking at your debts is to check that your total debts aren’t over 36% of your monthly gross income.
  • Loans
  • Student loans
  • Credit card payments
  • Streaming services like Netflix, Hulu, and Spotify
  • Phone bill
  • Medication you pay for each month
  • Child support
  • Education

After you’ve listed all your fixed expenses total the amount, subtract it from your monthly income, and that’s what you have left to spend on varied expenses . . .

#3: Set up your savings

Before we go into varied expenses though, let’s take a moment to think about your savings and retirement. Get a savings account if you don’t have one already, and set aside a portion of what’s left over after fixed expenses. Any amount you can afford to put away into a savings account each month will set you up for success in the long term, even if it’s only 5 to 10 dollars a month.

Aside from general savings and saving for retirement, you also want to set money aside in an emergency fund. It’s recommended that you have at least 3 months worth of your fixed expenses put away into an emergency fund at all times.

Digit is a great app you can use to help you plan and organize all your savings.

#4: List and portion out your varied expenses

Everyone’s list of varied expenses is going to look differently depending on what expenses do and don’t apply to you. Varied expenses are any expenses that are going to fluctuate in amount each month, or are considered more like luxury expenses than needed ones.

Varied expenses are a big reason to do a budget in the first place so that your varied expenses each month don’t overtake your more important fixed expenses and your savings. Here are some examples of varied expenses you might need to consider:

  • Groceries
  • Eating out
  • Entertainment
  • Gas and transportation
  • Recreation
  • Clothes
  • College textbooks

Another way to figure out the reality of what you’re spending on varied expenses is to look at your transaction history for the month and see 1) How much in total you were spending on varied expenses that month, and 2) What those varied expenses were on. Do this for a couple months back to get a more realistic idea of what you are spending on varied expenses each month.

Organizing your varied expenses is where you have the most control over your budget. Whatever is left over after your fixed expenses and your monthly payments to your savings account is what you have to spend on all your other spending for the month.

Here is where you will list out what all those varied expenses might be and portion what you have left in the budget into them. Remember that you don’t necessarily want to portion out 100% of what’s left into these categories so that you can accumulate a comfortable cushion in not just your savings account but your checking account as well.

Budgeting Tips

Invest

Making investments is a great way to beef up your financial portfolio. There are probably a trillion ways to invest, but the idea behind investments is that you put money into something that will give you more money in return later. This is called compounding interest.
interest-rate
A helpful tip to remember when going into any investment is the rule of 72. This rule means that if you take 72 divided by the interest rate you’ll figure out the estimated number of years it will take for your interest to double your initial investment.

Personal Capital and Acorns are some of the most helpful investing apps you can use to step up your investment game.

Where should I put my budget?

Figuring out where to even put your budget can get complicated. You can use excel or make your own table in Word or Google Docs or any note taking program of your choice. There are also many free budget templates online that you can print out and use. Budget tools are all around if you take the time to look and decide on which ones best suit your needs.

Click here for a free budget worksheet from the Federal Trade Commission.

You can also use budgeting apps to keep track of all your bills, expenses, plans, and goals. Some of these apps even allow you to connect your budget to your financial accounts.

Control your spending

Sometimes it can be difficult to control your varied expenses throughout the month and track your spending. You can make controlling how much you spend each month easier by using a prepaid debit card. With a prepaid debit card you put money on it like a gift card to yourself almost. You can also use a similar method of spending control by just taking money out and only using that cash for your varied expenses each week.

PocketGuard is an app that can help you track your purchases.

Get a Side Gig

Getting an extra source of income can really come in handy. There are a million different kinds of side hustles any ambitious person these days can get into. You can babysit, drive for uber, or sell your own products. The possibilities are endless and it never hurts to have a little extra money each month.

Plan to Decrease Debts

Debt can be a real financial weight on your shoulders, but it can also be a necessary evil in order to get a house, get a car, get through college, and much more. Decreasing the amount of debts you owe can still help alleviate some of that weight and provide more financial comfort and peace of mind.

So it’s important to budget with paying down your debts in mind. You can pay down debts quicker by planning to spend more on that fixed/necessary expenses each month, by spending less on varied expenses, or by getting another job to provide more income to put into your debts each month.
 
Budgeting doesn’t have to be hard. All you really need is 4 lists and a calculator! Everyone should practice using a budget now so that you can control your finances instead of your finances controlling you.


READ MORE
Check out some of other Check City articles on budgeting:
Budgeting for Dummies
 
What is a Budget?
 
Budgeting Tips You May Not Have Thought of Before
 
3 Simple Tips to Building a Budget
 
Ways to Keep Track of Your Spending

How I Learned to Stop Living Paycheck to Paycheck

Living paycheck to paycheck is actually very common in the United States. In fact, you could say that most Americans live paycheck to paycheck. As many as 78% of Americans live paycheck to paycheck—that’s 8 out of every 10 workers. And it’s not just low income workers that are living this way, even many workers who make $100,000 a year or more report to still be living paycheck to paycheck. This tells us that living paycheck to paycheck isn’t a problem of money, it’s a problem of mentality or the ability to keep ahead of your finances.

Why You Want to Stop Living Paycheck to Paycheck

The big problem with living paycheck to paycheck is you don’t have any extra funds each month. This makes you vulnerable when disasters and emergencies strike. If all of your monthly income is being used each month then you won’t have any funds to lean on when you suddenly have to repair your house after a flood, or you need to move, or travel for a wedding. It also keeps you from saving for important things like,

  • Savings
  • Retirement
  • Car
  • House
  • Repairs and renovations
  • Emergencies
  • Tuition
  • Accumulating wealth

Assess why you are living paycheck to paycheck

There are many reasons to be living paycheck to paycheck, but it usually comes down to one of three reasons. Either you aren’t making enough money, you are spending too much each month, or you have essential spending like debts or housing that overtake your whole monthly budget. After you determine which of these three reasons applies to you, you can better determine how to fix your finances.

Basically you need to see what is overtaking your budget and readjust to be living within your means. When you are living within your means you are able to save which helps you live better later on in life. Living within your means and putting away into savings each month is how to budget for the long-term.

Get a new job

If you just aren’t making enough money to live on, then you need to get a better job, a raise, or a second job or side hustle that can help make up for the little you’re making where you’re at. There are lots of job websites out there right now to help you find a better job. There are also many programs that can get you the training, education, or certifications necessary to help you qualify for better paying jobs.

Control your spending

If the problem is your personal spending habits, then you want to deal with this by controlling yourself and your budget more. this may sound boring or depressing to have to control your spending so strictly, but think of it as figuring out how much you are actually allowed to spend each month, rather than focusing on how much you can’t spend.

Downsize the way you live

You also might need to adjust your living situation. You might be paying too much for rent, compared to how much you make each month. If this is the case than you might need to move so your mortgage or rent is more doable within your budget. You can also downsize other aspects of your life, like transportation. Downsize to a more affordable vehicle, or try carpooling or biking to work to save on gas.

Take care of debts first

If you have a lot of debts that are bogging your budget down, you can try debt consolidation with your bank to get a better interest rate or payment plan. You can also downsize the way you live so that you can pay off your debts more quickly.
The rest of this article was written by a guest author named Adam. He wanted to share with everyone some helpful tips that he’s used to stop living paycheck to paycheck. We hope you enjoy his insights as much as we have!

How Adam Stopped Living Paycheck to Paycheck

Sometimes, during the week leading up to payday, I find myself clinging for dear life to my finances. If I can just survive until I get paid, I think to myself, then everything will be OK. I go into crisis mode, axing all discretionary spending and hoping that no unexpected expenses pop up.

When my paycheck finally appears in the mail, I breathe a huge sigh of relief. And then I revert to my old spending habits—eating out, buying the latest gadgets, etc. A few weeks pass, and I’m right back where I started, panicking about making it to my next paycheck.

It’s a cruel cycle, like the spin cycle of a washing machine. But instead of coming out clean at the end, I would just wind up dizzy and half-drowned.

If any of this sounds familiar, you’re not alone. Thankfully, I found a way to escape the constant spin cycle and stop living paycheck to paycheck.

My Arch-Nemesis: The Dreaded Budget

Saving money does not come naturally to me, and money gets spent often without me even realizing it. I knew right off the bat that I was going to get nowhere without a budget.

Budgets take hard work and discipline especially if you want to stop living paycheck to paycheck. You need the self-control to resist making any unnecessary purchases, and you need the personal honesty required to separate wants from needs.

Taking a Long, Hard Look at My Spending

It was time to take out the old magnifying glass and look at how I was really spending my money.
I was shocked. Did I really spend that much money eating out every month? It was atrocious how much of my paycheck went to entertainment.

As soon as I had a strong grasp on where I was spending my money, I was able to craft a budget that accounted for my needs, and even made a little room for some wants (for the sake of my sanity).

My Game Plan for Dealing with Credit Card Debt

One of the big motivators for turning my finances around was that I wanted so badly to get out of debt. Over the years, my spending habits had been subsidized by various credit cards, and I’d built up quite a chunk of debt.

Thankfully, my credit card debt provided short term goals to help me along the way. Basically, I would zero in on one balance, keeping all other balances on the back burner. Once that one card was paid off, I felt the accomplishment of having achieved a goal, which helped me forge ahead with my budget.

Reevaluating Progress

Every six months or so, I take time to reevaluate my budget and spending, and make adjustments accordingly. As I’ve reduced my debt and added to my savings, things have gotten easier. I’m no longer living paycheck to paycheck, and I’ve even been able to fit in a few purchases for things I really want, like gadgets and such.

How did you stop living paycheck to paycheck? Leave your tips in the comments section below.

6 Advantages of Using Checks

checks are better
 
Lots of people are still using checks and for good reasons. Checks actually have their own unique advantages and features that you may be missing out on if you only use cash or cards. Here are the 6 main advantages of using checks:

  1. Checks are safer to mail
  2. Checks can’t be used by thieves
  3. Checks are traceable
  4. Checks aren’t deposited immediately
  5. You don’t need a bank account to cash checks
  6. Checks make budgeting easier

Lots of people are still writing checks. Writing checks may seem old-fashioned, but there are many advantages to writing checks instead of using cash or credit cards. Using cards and cash might be quicker and easier, but checks have features and security that cash and cards just don’t have. Below are some of the main reasons you want to start making good use of checks.

#1: Checks are safer to mail

Sending a check in the mail keeps your money a lot safer than sending cash through the mail. When you have a check inside an envelope it can be very difficult for others to tell there is even a check inside. But if you put cash in an envelope it can be much easier for others to tell there is money inside since bills have their own distinct shape, material, and color.

#2: Checks can’t be used by thieves

Checks are also less attractive to thieves than cash. Checks cannot be cashed by just anyone, and that is too much of a hassle for a thief. Thieves want quick cash and forms of money that are untraceable, and checks are neither of those things. Also, when you carry checks you don’t have to carry cash or cards on you, making you less of a target while you are out.

#3: Checks are traceable

This is another reason why checks are safer than other forms of payment—they’re traceable. When you use a check the bank makes a copy so you can easily prove the payments you’ve made. All the information you would ever need about a payment is also written on your check and the underlying copy. With each check you can know how much you spent, who you paid, when you paid, and even what you were paying for.

#4: Checks aren’t deposited immediately

Another attractive thing about checks is the timing. It usually takes businesses a day or two to actually cash the check that you’ve written for them. This means that you have a day or two to make sure you have the money in your account to cover the check. This can be risky to do, but as long as you handle your checks wisely, then you should be able to use this feature to your advantage.

checks are better

#5: You don’t need a bank account to cash checks

When you get paid through direct deposit you need to have a bank account set up. But if you get paid with checks then you don’t need to use direct deposit or a bank account. If you get paid with checks then you can just cash them, you don’t have to deposit them into a bank account or deal with electronic funds.

Check City offers convenient check cashing services for all of your check cashing needs. If you’ve been paid with a check you can come to any convenient Check City location and get that check cashed immediately. Check City will cash payroll checks, cashier checks, counter checks, government checks, insurance checks, money orders, tax refunds, personal checks, and even out-of-state checks. If you have a check, it is likely that Check City will be able to cash it for you.

#6: Checks make budgeting easier

Every time you write a check you are simultaneously writing your own personal receipt to go along with that purchase. These slips of paper can make budgeting super easy as you can keep those in your checkbook, and at the end of each week or month you can see an overview of all your spending in one convenient place.

Check Cashing with Check City

You may be wondering why you should come cash your check with Check City instead of going to your bank. Well, there are several reasons.

#1: Open Late

One reason is that our locations are open later than almost every bank or credit union. We have extended hours so you can come cash your check after work, or almost whenever you’d like. This makes it so you can get your cash sooner rather than later.

#2: Fast and Easy

Check City also understands how important your money is to you so we want to make sure the process of cashing your check is fast and easy. Our personable staff will make sure your transaction goes through as quickly as possible. As soon as you come in, we’ll be ready to help you and get you on your way.

#3: Low Rates

Check City also offers extremely low rates when it comes to cashing checks. We will not charge you much to cash your check with us, and the convenience of coming to one of our locations greatly outweighs the amount we’ll charge you to cash your check.

You Need:

All you’ll need to come cash your check at one of our locations is your check and your photo ID.

You Do:

All you’ll do is walk into one of our many locations, fill out a quick customer information form, and walk out with your cash in hand. Check City has locations in Utah, Nevada, Colorado, Virginia, and Maryland. At Check City, we want to make sure you get your money when you want it and how you want it. That’s why we offer convenient check cashing services that you are welcome to use anytime.

Cash Business Checks with Check City Too!

Check City also cashes business checks. This means that if people have paid your business in checks you can cash them easily here. In today’s credit driven economy, cash flow management is a challenging task for many small to medium-sized businesses. Check City has provided financial services to the public and its businesses since 1986 and we value the trusting relationship we’ve fostered with our communities ever since. Check City’s Business Check Cashing provides business owners immediate access to working capital by fast tracking the processing of checks to make your business funds available instantly. Cashing business checks at Check City is a great idea because there are 1) NO enrollment fees, 2) NO 3 to 10 day check processing holds, 3) the funds are available instantly, 4) gives your business the freedom to accept checks from your customers, and 5) we have convenient and professional locations.
 
Don’t waste your time thinking checks are a useless tool of the past. Checks are a useful financial product for personal and business use with their own unique features. Checks also provide a level of security in your transactions that cash does not. So don’t forget about this important tool in your financial arsenal and learn to use checks to their full advantage.

NEED QUICK CASH?

start your application

* Required Field

 

  • HACKER SAFE certified sites prevent over 99.9% of hacker crime.
  • Cashwise
  • RLS
  • Check City BBB Business Review
  • CFSA
  • UCLA

Apply Now Or Call 1-800-404-0254

Find A Location | Contact Us | Wireless Policy | Terms of Use | Privacy Policy | © 2004-2019 Check City Online. All Rights Reserved.