Create a Budget and Stick with it

Making and sticking to a budget is a key step toward getting a handle on your debt and working toward a savings goal—of any kind. Let's say you want to set money aside for emergencies or you aspire to save up for a much larger goal like a car, down payment on a house, or retirement. Until you get a realistic picture of how much money you're bringing in and where it's going, it's difficult to know whether you'll have enough left over to put away.

Getting started can be the hardest part, especially if your finances feel out of control, but these easy-to-follow steps are designed to help you create a budget that really works for you:

• Step 1: Where does my money come from? The first place to start is getting a complete picture of where your money comes from. You may be self-employed, have multiple jobs, or receive child support or government benefits—all of these sources should factor into what you have available to make ends meet. Start by recording all of your income with this Income Tracker: Link opens in a new windowhttps://files.consumerfinance.gov/f/documents/cfpb_your-money-your-goals_income_benefits_tool_2018-11_ADA.pdf.
• Step 2: Where does my money go? Equally important but the heaviest lift is logging your spending, so you get a realistic picture of what your money, on an average month, is going to. This Spending Tracker helps you both log and sort your spending by categories like utilities and housing to eating out and entertainment: Link opens in a new windowhttps://files.consumerfinance.gov/f/documents/cfpb_well-being_spending-tracker.pdf. If this feels overwhelming, start small and look at your expenses one week at a time by either reviewing your receipts or checking account. You could also start a daily log of your expenses so you're making sure to capture those small expenses—like buying breakfast or lunch instead of bringing it with you—that add up over time.
• Step 3: What are all my bills, and when are they due? If you're coming up short at the end of the month, it could be that the timing for your bills and income don't match. This Bill Calendar is designed to help you remember when your bills are due, but also keep in mind weeks when you need to be careful about your spending: Link opens in a new windowhttps://files.consumerfinance.gov/f/documents/cfpb_your-money-your-goals_bill_calendar_tool_2018-11_ADA.pdf. Missing payments or not paying on time can also have larger impacts on your credit scores and overall financial wellbeing.
• Step 4: Create your working budget. Once you've identified all of your income sources and started tracking your spending and when your bills are due, this Budget Worksheet pulls everything together so you have a working and realistic budget: Link opens in a new windowhttps://files.consumerfinance.gov/f/documents/cfpb_well-being_monthly-budget.pdf.

Creating a budget will help you figure out if you have enough money to cover your expenses, while also having enough to save or spend on something extra you may want for yourself or your family. Be sure to update your budget if you experience a change in employment or your spending habits.

Sticking to a Budget

Changing your money habits won't happen overnight. Making—and sticking—with a budget takes effort, but here are a few important tips for being successful:

• Create a tool that works for you. Be realistic and start looking at your finances one month at a time. Create a way that's easy for you to track income and spending in real time, whether that's a daily journal or putting receipts in a folder that you review at the end of each week.
• Analyze your spending habits. This is an opportunity to take a comprehensive look at your spending, and it is also the easiest way to look for areas where you can cut back. If you know you're prone to impulse spending, create a plan that's doable to help you limit that spending. Track your spending with this easy tool: Link opens in a new windowhttps://www.consumerfinance.gov/about-us/blog/track-your-spending-with-this-easy-tool.
• Set a goal. Whether it's small or large, it's helpful to have an end goal and something you're working towards. Use this worksheet to help: Link opens in a new windowhttps://files.consumerfinance.gov/f/documents/cfpb_your-money-your-goals_SMART-goals_tool_2018-11.pdf. Also, rewarding yourself, even in small ways, can help you keep up with any progress you've made.
• Develop a support system. Like sticking to an exercise routine, it's easier when you're surrounded by families and friends you can trust to offer you support, either by doing a budget with you or listening when you're struggling.

Take control of your finances.

The Consumer Financial Protection Bureau (CFPB) created Get a Handle on Debt Boot Camp to make money management easy by delivering tools and strategies directly to your inbox. Sign up today to start managing your debt by budgeting smarter, paying your bills on time, tracking your spending, paying down existing debts, and earning extra income: Link opens in a new windowhttps://www.consumerfinance.gov/consumer-tools/debt-collection/get-handle-debt-boot-camp.