Are You Financially Fit?

What's a Budget?

A budget is a plan that shows how you will spend your money each month. It helps make sure you have enough money to pay your bills and other expenses. 

Without a budget, you may run out of money before your next paycheck.

A budget helps you:

  • See how much money you earn
  • Understand how you spend your money
  • Decide what you need to spend money on
  • Find areas where you can spend less or save more

Why Saving Money Matters

Saving money can be hard, especially when expenses go up and your income stays the same. Saving even small amounts can make a big difference. Here are some reasons saving is important:

Emergencies
Unexpected expenses can happen to everyone. Saving a little now can help cover future emergencies.

Big Expenses
Some costs are large, such as a car, a trip or an apartment security deposit. Saving can help you prepare.

Personal Goals
You may want to pay for classes, visit family or work toward another goal. Saving ahead of time can help you avoid using credit cards or borrowing money.

Retirement
Saving for retirement is important, even if you can only save a small amount. RetireReadyTN advisors are available to help, whether you're just starting or getting ready to retire. Call 800-922-7772 to schedule a session.

Ways to Save Money

Here are some simple steps that can help you start saving:

  • Track everything you spend for one month. Small purchases can add up.
  • Use credit cards only if you can pay the full balance when the bill is due. This helps you avoid interest on what you owe.
  • Pay bills on time to avoid late fees and extra charges.
  • Keep your savings separate from your spending money.
  • Store cash in a safe place.
  • Consider opening a savings account at a bank or credit union.

How to Make a Budget

Step 1: List Your Expenses

Expenses may include:

Monthly bills:

  • Rent or mortgage
  • Utilities
Bills paid once or twice a year:
  • Car insurance
  • Annual subscription services

Other expenses:

  • Food
  • Gas
  • Clothes
  • Entertainment
  • Family support
  • Unplanned expenses, like car repairs or medical bills
  • Debt, like credit card payments

Some bills change every month. Looking at what you paid during the same month last year can help you plan. For example, you might need $200 for your gas bill in January, but only $30 in July.

Step 2: List Your Income

Write down all the money you earn, including:

  • Paychecks
  • Any other income sources

Step 3: Compare Income and Expenses

Subtract your expenses from your income.

  • If the number is greater than zero, you're living within your budget.
  • If the number is less than zero, you're spending more than you earn.

If needed, review your expenses to see what you can reduce.

Use the Make a Budget Worksheet to help track your income and expenses.

How to Use Your Budget

  • At the start of the month, plan how you will spend your money.
  • Write down what you actually spend each day.
  • At the end of the month, compare your plan to what you spent.
  • Use what you learn to plan next month's budget.

More Financial Resources