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Jul 25, 2024
Creating a sustainable monthly budget is a crucial step toward achieving your financial goals. Whether you want to save for a vacation, pay off debt, or build an emergency fund, a well-planned budget can help you manage your finances effectively. Bank of Elk River customers have an extremely helpful budgeting tool within digital banking called Money Manager. Here are some basic ways to use Money Manager to help set a budget and provide a holistic view of your finances.
1. Assess Your Income and Expenses - The first step in creating a budget is to assess your income and expenses. Start by listing all sources of income, including your salary, freelance work, and any other sources of revenue. Next, track your expenses for a month to get a clear picture of where your money is going. Categorize your expenses into fixed (e.g., rent, utilities) and variable (e.g., groceries, entertainment) costs. Inside Money Manager, you can add your income and bills under the Cashflow area. You can also use the Spending by Category area to identify expenses.
2. Set Financial Goals - Identify your short-term and long-term financial goals. Short-term goals might include saving for a new gadget or paying off a small debt, while long-term goals could be buying a house or retiring comfortably. Having clear goals will help you stay motivated and focused on your budgeting efforts. Use the Goals Progress area in Money Manager to add saving and spending goals. You can set custom goals or choose from common goals listed, like paying off a credit card or saving for a house.
3. Create a Budget Plan - Based on your income and expenses, create a budget plan that allocates funds to different categories. A popular method is the 50/30/20 rule, which suggests allocating 50% of your income to needs, 30% to wants, and 20% to savings and debt repayment. Adjust the percentages based on your financial situation and goals. You can set a budget for various categories in Money Manager, select an amount, and set up budget alerts.
4. Track Your Spending - Tracking your spending regularly is essential to staying within your budget. Use your Bank of Elk River digital banking account and the Money Manager tool to monitor your spending closely. Review your spending at the end of each month to identify areas where you can cut back and save more.
5. Adjust and Adapt - Your budget is not set in stone. Life changes, and so do your financial circumstances. Be prepared to adjust your budget as needed. If you receive a raise, consider increasing your savings contributions. If you face unexpected expenses, find ways to cut back in other areas to stay on track.
6. Build an Emergency Fund - An emergency fund is a crucial component of a sustainable budget. Aim to save at least three to six months’ worth of living expenses in a separate savings account. A high yield money market account like our Money Market Premier not only keeps your money safe for an emergency but helps you continue to build your emergency fund. This fund will provide a financial cushion in case of unexpected events such as job loss or medical emergencies.
Creating a sustainable monthly budget using a tool like Money Manager is a powerful way to manage your finances and reach your financial goals. By assessing your income and expenses, setting clear goals, and tracking your spending, you can take control of your financial future. Remember, budgeting is a continuous process that requires regular review and adjustment. Stay committed, and you’ll be well on your way to financial success.
1. Assess Your Income and Expenses - The first step in creating a budget is to assess your income and expenses. Start by listing all sources of income, including your salary, freelance work, and any other sources of revenue. Next, track your expenses for a month to get a clear picture of where your money is going. Categorize your expenses into fixed (e.g., rent, utilities) and variable (e.g., groceries, entertainment) costs. Inside Money Manager, you can add your income and bills under the Cashflow area. You can also use the Spending by Category area to identify expenses.
2. Set Financial Goals - Identify your short-term and long-term financial goals. Short-term goals might include saving for a new gadget or paying off a small debt, while long-term goals could be buying a house or retiring comfortably. Having clear goals will help you stay motivated and focused on your budgeting efforts. Use the Goals Progress area in Money Manager to add saving and spending goals. You can set custom goals or choose from common goals listed, like paying off a credit card or saving for a house.
3. Create a Budget Plan - Based on your income and expenses, create a budget plan that allocates funds to different categories. A popular method is the 50/30/20 rule, which suggests allocating 50% of your income to needs, 30% to wants, and 20% to savings and debt repayment. Adjust the percentages based on your financial situation and goals. You can set a budget for various categories in Money Manager, select an amount, and set up budget alerts.
4. Track Your Spending - Tracking your spending regularly is essential to staying within your budget. Use your Bank of Elk River digital banking account and the Money Manager tool to monitor your spending closely. Review your spending at the end of each month to identify areas where you can cut back and save more.
5. Adjust and Adapt - Your budget is not set in stone. Life changes, and so do your financial circumstances. Be prepared to adjust your budget as needed. If you receive a raise, consider increasing your savings contributions. If you face unexpected expenses, find ways to cut back in other areas to stay on track.
6. Build an Emergency Fund - An emergency fund is a crucial component of a sustainable budget. Aim to save at least three to six months’ worth of living expenses in a separate savings account. A high yield money market account like our Money Market Premier not only keeps your money safe for an emergency but helps you continue to build your emergency fund. This fund will provide a financial cushion in case of unexpected events such as job loss or medical emergencies.
Creating a sustainable monthly budget using a tool like Money Manager is a powerful way to manage your finances and reach your financial goals. By assessing your income and expenses, setting clear goals, and tracking your spending, you can take control of your financial future. Remember, budgeting is a continuous process that requires regular review and adjustment. Stay committed, and you’ll be well on your way to financial success.
