By CATRINA TATE 

Indianapolis Recorder’s Money Smart Week continues with Everwise Credit Union sharing strategies for creating a budget. 

Creating and maintaining a budget is key for your financial health. It only requires a few simple steps, but consistency is key.  

Tracking your spending is the first step.  

Here are 4 easy ways to track your spending: 

1. Choose your tools. Use a budgeting app, like YNAB , a spreadsheet, the good old-fashioned envelope system, or the simple method of writing things down on paper. This will help you track your spending and find where you might be wasting money! 

2. Review income and expenses carefully. Reference account statements, bills, and pay stubs. Track the purchases you make by reviewing your monthly checking account and credit card statements.  

3. Categorize expenses and purchases. Save bills and receipts so you can review all purchases you’ve made at the end of the month. Don’t forget to include any automated payments you may rarely think about, such as subscription fees and insurance premiums. 

4. Keep a record of how much cash you withdraw and spend. Review your bank statement or online transaction history to examine your cash withdrawals. 

Now that you’ve tracked your spending, you’re ready to create a budget. If you keep paying attention throughout the month, you’ll do great!  

Here are 5 easy steps to create and stick to a budget: 

1. Tally up all income sources and total monthly expenses. Track your expenses for at least three months so you know your average spending. 

2. List your needs. Include anything that is essential such as your rent or mortgage payments, savings, food, and clothing. Remember, having emergency savings is essential to ensure you are prepared for unexpected expenses. 

3. List your wants. Include anything not essential such as entertainment, brand-name clothing, and dining out. A good rule of thumb is the 50/30/20 method—spending roughly 50 percent of your after-tax dollars on necessities, no more than 30 percent on “wants,” and at least 20 percent into savings or paying off debts. 

4. Assign dollar amounts to expenses. Start your list of expenses with fixed-cost needs, then variable cost needs, and finally, your wants. Don’t forget other expenses that come up at different times of the year, like gifts, holiday expenses, insurance premiums and taxes. Make sure your total expenses do not exceed your total monthly income. 

5. Review and tweak as necessary. You will likely need to adjust the amounts in each expense category at least once every six months to keep your budget relevant. If you have remaining funds, you may want to reallocate those funds toward your debt or savings. 

Keep this up and you’ll be on top of your money in no time! You’ll know how you spend your money and will be able to adjust or eliminate non-essential purchases, reduce debt, increase savings and meet your financial goals.  

Visit these educational links for more resources about Creating a Budget and Building an Emergency Savings. 

Catrina Tate is vice president of Retail at Everwise Credit Union with more than 21 years of banking experience. Visit everwisecu.com.

For more news courtesy of the Indiana Minority Business Magazine, click here.