Know the Basics of Budgeting

If you have never created a budget, the new year is the perfect time to do it. In this article, we’ll share some tips for beginning to budget.

When creating a budget, it’s important to:

• Understand your spending habits
• Separate needs from wants
• Take advantage of free or low-cost activities
• Involve family in the budgeting process

An integral part of budgeting and financial wellness is to establish future goals for saving and investing. Once you’ve covered your basic expenses, put a little money aside each paycheck in an emergency fund. Start small. Saving $20 a week may not seem like much, but it adds up to $1,000 in a year. This will provide a cushion when unexpected expenses such as car or home repairs or medical co-payments inevitably arise.

Whether money is tight, or you just want to cut expenses so you can save more, keep your focus on daily or monthly essentials such as mortgage or rent, groceries, utilities and other household bills.

Limit spending. Some of the ways to cut costs are:

• Reducing cable and internet services
• Canceling or suspending gym memberships you aren’t using
• Evaluating your cell phone plan and eliminating unnecessary services
• If you still have a land line, do you need it or use it? If not, disconnecting it may save you money each month.
• If you own two cars and are only using one because you work remotely, you may be eligible for a premium reduction on your car insurance.
  
  

Budgeting Tools May Be Just a Few Clicks Away

You can leverage the power of technology to automate budgeting and tracking your spending. Many of the personal finance tools available allow you to aggregate your financial accounts and track any activities in them. This type of tool connects your accounts like bank, mortgage, investment portfolio, retirement and credit cards in one place so that you can easily access important information on personal spending, cash flow, savings, and investments. Using an account aggregation tool will assist you in creating a realistic budget because you will see your typical cash flow and expenses for each month.

Here are some financial apps that Forbes and Nerd Wallet websites have named among the best financial apps of 2024.

• You Need a Budget
• EveryDollar
• Honeydue
• Monarch
• Quicken Simplifi
• Pocketguard

With so many options, how do you choose one? Finding the right financial app can feel like finding the perfect pair of shoes: it needs to fit just right. Consider the following to help you pick the best one for your needs.

First, think about what you need. Are you looking to manage a budget or manage debt? Apps like Monarch are designed for budgeting and expense tracking, while apps like EveryDollar assist in tackling debt. Are you looking to set financial goals? Quicken Simplifi is for those focused on managing household finances and who value being able to add many people to their budget.

Next, consider ease of use. If you’re not a tech wiz, look for an app with a user-friendly interface. Apps like Pocketguard are known for making it easy to see where your money is going without getting lost in a sea of charts and numbers.

Security is crucial, too. Ensure the app uses bank-level encryption to protect your data. Apps like You Need a Budget and Honeydue offer strong security features to keep your information safe. In addition, Honeydue is a handy tool for couples who want to manage their money together, offering transparency, easy budgeting and helpful reminders, all while promoting financial communication and collaboration.

Don’t forget about costs. Some apps are free, but others have subscription fees. Also, not all budgeting software offers free trials. Decide what you’re willing to pay for convenience and extra features.

Lastly, read reviews and ask around. Sometimes, the best insights come from people who’ve been using the app.

In the end, the best financial app for you is one that fits your lifestyle and helps you achieve your financial goals with ease.

Your financial planner can help you plan a budget and provide insight on financial apps. Financial planning is offered to MMBB members at no cost as a benefit of membership. If you’re an MMBB member, contact one of our CERTIFIED FINANCIAL PLANNER™ professionals for assistance with budgeting, managing expenses or other financial concerns, at [email protected] or 800.986.6222.

The information contained herein is for informational purposes only.  While MMBB made every attempt to ensure that the information is accurate, MMBB is not responsible for any errors or omissions or the results obtained from the use of this information.  MMBB is not liable for any success or failure that is directly or indirectly related to the use of the information contained herein.  The information contained herein does not constitute any financial, insurance, investment, legal, or tax advice.  In no event shall, MMBB and/or its fiduciaries, directors, officers, employees, or agents thereof be liable for any special, direct, indirect, consequential, or incidental damages or any damages whatsoever, whether in action of contract, negligence or tort, arising out of or in connection with the use of the information contained herein.