Five Tips for Creating a Personal Budget

Almost three-quarters of adults say money has them feeling stressed, according to the American Psychological Association. While we grew up hearing from our parents that money doesn’t grow on trees, we don’t have to stay up nights worrying about our financial future if we take a few positive steps recommended by the experts. Budgeting takes discipline but can a satisfying payoff – in the bank account and reduced stress. Here are five straightforward steps to help fatten that piggy bank and trim unnecessary spending.

Life Throws Lemons – At some point, an unforeseen crisis will shake your financial security. Whether it’s a car accident, an unexpected trip to the emergency room, a last minute flight to visit a friend or relative in distress, or being laid off – disasters happen. While the future isn’t predictable, knowledge is power. Suze Orman, an internationally acclaimed personal finance expert, suggests expecting the unexpected by setting aside eight months of living expenses into a savings account to prepare for life’s uncertainties. This may sound daunting but what’s more important? A new pair of shoes now or a sound mind and more secure future? Make this a goal. Every penny set aside helps.

Define the Why? – Saving money and sticking to a budget is easier once a motive is determined. Aside from an emergency fund, ask yourself why a budget is necessary. Is it for early retirement, a college fund, college for the kids, remodeling the kitchen or taking that dream vacation you’ve been meaning to plan for years? The first step is to determine your goal amount. Put it in writing – and feel empowered to be taking affirmative action in saving funds for your future pleasure.

Master Your Card – Once a goal is set, analyze your spending habits. How much money do you make? Where do you spend it? recommends tracking ALL expenses for 30 days for an accurate analysis. Use free software programs, or even an Excel spreadsheet. Keep every receipt. Organize purchases into categories such as housing, transportation, entertainment, food, dining out, recreation, etc. Once a financial baseline is identified, it will be easier to see which spending habits can be simplified, or eliminated altogether. Tracking these monthly going forward is also empowering.

Know the Transaction Triggers – Have an emotional connection to your spending? As you examine your financial baseline (from the previous step), do you have a tendency to spend during a time of added stress or sorrow? On days with multiple work deadlines are you buying meals for lunch versus bringing one from home? According to, emotional spending occurs when you buy something you don’t need and, in some cases, don’t even really want, as a result of feeling stressed, bored, under-appreciated, and unhappy or any number of other emotions. Know what triggers your emotional spending and plan ahead. This will help keep you on track and one step closer to your goal.

Bank on Your Future – So, now you’ve reached financial zen. You have your goal mapped out and know areas to cut back on spending. The final step is simple: keep focus and stay motivated! Remember, a budget isn’t constricting. It sets people free. There are also many reputable money management resources available to help track spending, such as and Buxfer. Both resources are free and even have apps for smartphones that will alert users if a budget is exceeded.


Michelle Castle provides mortgage loans to all of North Texas and Southern Oklahoma. Call Michelle Castle at (903) 892-1998 if you are looking for a home loan in North Texas and Southern Oklahoma.

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