The Budgeting Process

Step 1: Know Your Goals

Identify your financial goals.

Budgeting is making a plan for your money. Knowing your goals will help guide you as you make your budget to spend your money in a way that aligns with your goals and values.

Step 2: Know Your Income

Track your income and know exactly how much you’ve got available.

Sources of income can include work; disability benefits like SSI, SSDI, or ABD; or SNAP benefits. Income can change every month, especially if you work part time.

Step 3: Track Your Expenses

Pick a method of tracking your spending to find out where your money is going.

You can track your spending with an app, a piece of paper, a spreadsheet, or whatever method works best for you. We recommend tracking your expenses for 30 days before moving to step four.

Step 4: Make a Plan

Create your budget.

After tracking your spending for 30 days, create your budget using your spending tracker and income to guide you. After creating your budget, one of three things will happen: your budget breaks even, your budget has a surplus, or your budget has a deficit. If your budget breaks even, are you able to save and pay all your bills on time? If your budget has a surplus, are you going to save or spend the surplus? If your budget has a deficit, are you able to increase your income or decrease your expenses? There are lots of ways to use income, but one of the most important things you can do with your money is to pay your bills on time, every time.

Step 5: Track Your Progress

Review your budget regularly.

Tracking your progress includes reviewing and updating your budget as needed. Compare your budget to your spending using your spending tracker and bank statements and revisit the previous steps in the budgeting process if you’re finding that your budget regularly has imbalances (positive or negative). This can also help you check in to see if your budget still aligns with your values and goals.

Budgeting Tips

Automate!

Savings by setting up automatic transfers

Bills by using online bill pay or autopay

Tracking by using an app

Build habits!

Always shop with a list

Pay yourself first (put money into savings first)

Plan for big purchases and comparison shop

Buy less than you can afford

Put fun stuff in your spending plan

Curb impulse spending!

Preload a gift card for places you regularly impulse shop at

Delete saved cards from online accounts

Use cash

Some content is adapted and modified from the Keys to Your Financial Future curriculum published by the Annie E Casey Foundation.