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Budgeting for Beginners

Budgeting for Beginners

August 04, 2022

Maintaining a budget is one of the first steps towards financial success and planning for your financial goals. While Compass Financial helps with all sorts of complex financial planning strategies, budgeting for beginners is something our advisors get asked about a lot. Budgeting is predicting how much you will spend in the future based on how much money you earn and spend during a given period. The goal of budgeting is to learn your spending habits and change them to meet your financial goals in life.

Our financial team´╗┐ wants to give you the tools to start budgeting on your own. Learn how to budget for beginners from Compass Financial and begin your journey to financial freedom.

Making A Budget & Understanding The Why

The first step to making a budget is understanding your “why”. One of the main questions our financial advisors ask when you sign up for a consultation is, “what are your goals, and what do you want to achieve with your financial success?”.Without having a reason to give you motivation, you likely won’t have an easy time sticking to your budget. Once your why is determined, we can start to develop a plan to help get you closer to achieving your goals.

How To Budget For Beginners

Budgeting is about changing your behavior and meeting a goal. You can accomplish both by following these four main steps when budgeting for beginners:

  • Know Your Income - The first step to a budget is to know or estimate how much money you’ll have coming in each month. Doing so will allow you to create a plan for future expenses.
  • Plan Your Expenses - Estimate exactly how you want to spend your income and decide if you can set aside any for savings each month. A plan can help guide your spending while providing an opportunity to practice new spending habits.
  • Track Your Spending - Set aside time to see how you’re actually spending your money each month. We recommend doing a mid-month check-in so you can adjust if necessary, then tracking your actual overall spending at the end of each month. It’s a great way to hold yourself accountable and ensure you’re on track towards your financial goals.
  • Compare Plan To Actual Expenses - The hardest part is seeing if you’ve stuck to your plan. Your actual spending might not always look like the plan at first, but the more discipline you get in your spending habits, the more likely you’ll be able to stick to a budget that works for you. If you’re consistently overspending in a certain area, consider reevaluating your priorities or try to be more diligent and keep your big picture goal in mind.

How To Stick To A Budget

Many people know it’s important to keep a budget, but it can be difficult to stick with it. A few things to keep in mind as you get started:

  • Keeping it simple will help you follow through.
  • Remain disciplined in tracking.
  • Identify and eliminate unnecessary expenses.
  • Set aside savings for your goals if possible.

Get Budgeting Help For Beginners & Beyond at Compass Financial in Des Moines

If you still feel like you need help with budgeting or have questions about sticking to a budget, our financial team can help with hourly financial planning services! We offer a complimentary initial consultation to everyone; then, we’ll work together to set your financial goals and work towards a better future. Simply give us a call at 515-327-1020, or contact our advisors online today.

At Compass Financial Services, we deal with budgets of all sizes and people in different stages of life. That’s why we offer a variety of financial services to guide you on your financial journey and adjust to your goals as you and your priorities evolve. We look forward to working with you!

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