Family money matters: Craft a budget you can stick to

Erika Enigk

Handling personal finances is, for most, a dreaded chore, which means that creating a budget can be one of the most daunting tasks you’ll face.

However, taking the time to write a formal — but flexible — budget can help you meet savings goals as well as pay off debt, said Laura Adams, who blogs about finance under the name Money Girl and hosts the Money Girl Podcast.

1. Determine your spending baseline Look at your spending habits over the last three months to a year, and give things categories, such as rent/mortgage, entertainment, etc. Try for help with the dirty work. “It’s a super way to get started,” Adams said. “You’ll start to see patterns.”

2. Analyze your spending history Look for problem areas, Adams said. Are you using your credit card too much? Do you have savings for a rainy day or retirement?

3. Set goals One good idea is to work on building an emergency fund of three months to a year, Adams said. Make sure to save for possible incidental expenses, too. If your house or car needs repairs, have money in the budget for those things.

4. Write it up Decide where you can cut back on spending, and put that money away. An automatic withdrawal from your paycheck into a retirement or savings account may help because you won’t even think about spending it, Adams said.

5. Monitor your variances, and make adjustments If you’re spending more than you anticipated in one area, cut back in another. A flexible spending plan will be easier to stick to, Adams said. If plans get derailed because of a job loss, you may need to cut back on almost everything except the essentials. Once you’re back to work, continue living frugally, and you may be able to catch up on your savings goals.

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More financial tips from Adams can be found on the Quick and Dirty Tips network at

GateHouse News Service