Budgeting.  What feelings does this word invoke in you? Let me challenge you to redefine the word and what it means to you in regards to your finances.  It can be an uncomfortable process, but the reward you may reap in the end could make it worth it.

It does not matter where you are in life you need to make your money work for you. You may have just been hired, just married, recently separated or divorced, years into your career or in retirement.  Money means a lot of different things to each of us.  After a number of years in the financial field one thing is clear to me; most people do not talk openly about their finances.  I being one of those people; have come to realize that the way I handle money on a daily basis has changed greatly after having an open dialogue with my spouse on how we can better manage our finances.  A parent, friend or advisor could be the person you choose to have this conversation with.  Part of the challenge is to set finance goals for and start the dialogue.  The person that you choose to discuss your finances with (spouse, parent, friend, etc.) can help to keep you on track with your budget.  They can help to make sure that you are sticking to your game plan.

Budgeting may be a scary word to you.  It can sound constricting, too complex and may send some people into a panic attack.  Suppose it was as simple as a piece of paper, a pen and calculator. Well, it is or can be. It can be as simple or as complex as you want it to be.  A budget is a pre-set game plan for where your income will go each month/paycheck.   A game plan to cover  not only your daily living expenses, but also how you will save an emergency fund (typically 3-6 months of expenses), how you will buy that new home or new car or how you will be able to retire one day.

You might be asking how do I get started?  Start with your income (I have found it is easiest for me to use take home pay), subtract the necessities (housing, food, transportation, clothing, utilities), then subtract the “extras” (gym memberships, dining out, entertainment, etc.).  Make sure to add in savings for the “unexpected” expenses (car repairs, doctor bills, house repairs, etc.) because although we do not know when they will happen, at some point they will.   What are you left with after you have subtracted all of your expenses?  If you have money left over, where can you save that (an emergency fund or a retirement account)?  If you do not have money left over, what expenses can you reduce or eliminate?  Each budget may look different as different expenses come up and that is normal.

If you take time to look at how and where you are spending your income, what possibilities will you discover?  Small steps, like saving, repeated over and over can have great impact over time.

The author of this article, Courtney Arria, CFP® is a LPL Financial Advisor at Urist Financial and Retirement Planning, Inc., located in East Syracuse, New York.   Courtney Arria is a CERTIFIED FINANCIAL PLANNER™ practitioner and Registered Representative with LPL Financial.  She is dedicated to building personal connections with clients, which leads to a clear understanding of their financial needs and how she can help them to pursue their financial goals. She strives to simplify clients’ finances in order to educate and empower. Courtney can be reached at 315-445-2147 or courtney.arria@lpl.com.  Company information can be found at www.uristfinancial.com.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.