Take control of your money with these budgeting tips
MINNEAPOLIS – Starting and implementing a budget can be a daunting task, especially if it's unfamiliar territory.
Financial advisors say budgeting is the cornerstone of financial planning. If you can't understand how much money is coming in and how much you're spending, then you can't create an emergency fund, you can't pay down debt or plan for retirement. Without budgeting, you can't become financially independent.
"People worry about doing it right," Grant Meyer, a CFP with GTS Financial and a volunteer with the Financial Planning Association of Minnesota (FPA of Minnesota), said. "I would say the best thing is to do something because something is better than nothing."
Meyer said it could be an app, a spreadsheet or maybe pen and paper. Bottom line is, Meyer says if taking control of your money is your goal, you need to track what's coming in and what's coming out each month.
"The biggest thing we want to bring awareness to where you're money is going. Step one, figure out what works for you," he said.
While it's easier said than done, Meyer said budgeting is simple. Once you pick a method, automate your money, meaning automatically have your bills, retirement and savings pulled from your cash flow. Lastly, create an emergency fund of a least $1,000, to avoid using a credit card for surprise or emergency purchases.
FPA of Minnesota is a non-profit that provides loads of financial resources online. It also has CPAs and financial advisors who can work with folks struggling to understand their finances, free of charge. The organization also offers webinars, articles and more to help people start a journey toward financial freedom.
It's a concept Lisa Baker is quite familiar with.
"I think the hardest thing for families is to really come to terms with what they are actually spending," Baker said. "It's hard. Life is expensive."
Baker has spent nearly 15 years blogging about family financers as the "Twin Cities Frugal Mom." She recognizes staying motivated in your financial journey, isn't always easy.
"Don't look at what I'm giving up, but think about what I'm gaining long term," she said.
She also recommends looking at the big picture.
"Having a vision, knowing where you are going, that's everything," she said.
Outside of budgeting, Baker writes about saving money with a family around the Twin Cities. Over her years of blogging, she's found loads of tricks and coupons to save. She even offers budgeting resources, including free downloadable templates from tracking debt payments, to creating financial goals.
Baker will be speaking at two separate Ramsey County library events. To learn more, click here.
