Broker Check

Are You on the Road to Financial Wellness?

It's never too late to start. In this ebook, we outline effective financial strategies for every stage of the journey.

Thank you! Oops!
Budget Checkup

Budget Checkup

February 23, 2024

Are you digging through shoe boxes or manila folders full of receipts, gathering mortgage, retirement, and investment account statements and then relying on computer software to take advantage of every tax break the code permits?Every year, about 140 million households file their federal tax returns and do just that.

Sound familiar? Seems a shame not to make the most of all that effort...

Tax preparation may be the only time of year many households gather all their financial information in one place.

That makes it a perfect time to take a critical look at how much money is coming in and where it’s all going.

In other words, this is a great time to give you household Budget a Checkup.

Six-Step Process

A thorough budget checkup involves six steps. Let's briefly take a look at each one.

1. Create Some Categories.

Start by dividing expenses into useful categories. Some possibilities: home, auto, food, household, debt, clothes, pets, entertainment, and charity. Don’t forget savings and investments. It may also be helpful to create subcategories. Housing, for example, can be divided into mortgage, taxes, insurance, utilities, and maintenance.

2. Follow the Money.

Go through all the receipts and statements gathered to prepare taxes and get a better understanding of where the money went last year. Track everything. Be as specific as possible, and don’t forget to account for the cost of a latte on the way to the office each day.

3. Project Expenses Forward.

Knowing how much was spent per budget category can provide a useful template for projecting future expenses. Go through each category. Are expenses likely to rise in the coming year? If so, by how much? The results of this projection will form the basis of a budget for the coming year.

4. Determine Expected Income.

Add together all sources of income. Make sure to use net income.

5. Doing the Math.

It’s time for the moment of truth. Subtract projected expenses from expected income. If expenses exceed income, it may be necessary to consider changes. Prioritize categories and look to reduce those with the lowest importance until the budget is balanced.

6. Sticking to It.

If it’s not in the budget, don’t spend it. If it’s an emergency, make adjustments elsewhere.

What Are My Next Steps?

Tax time can provide an excellent opportunity. You have a chance to give your household budget a thorough checkup. In taking control of your money, you may find you are able to devote more of it to the pursuit of your financial goals.

Need some help getting your finances organized?

Let's chat and see how having a Certified Financial Planner on your side can

help you take your best next steps.

CLICK the link to schedule your time -

  1., 2023

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.