Home Financial Aid Tips Creating a Budget Will Start You on Your Journey to Financial Success
Creating a Budget Will Start You on Your Journey to Financial Success

Creating a Budget Will Start You on Your Journey to Financial Success


By Ryan Laspina
Senior Specialist, Red Flags and External Reviews at APUS

I have always considered myself financially savvy. I did not live above my means. I did not spend lots of money on the newest gadgets and fads. I kept a healthy amount of money in a savings account. Then came adulthood and I found myself in a financial position that was not nearly as strong as it was in my early 20s.

The biggest financial burden I assumed was buying a house at the age of 25. If being a homeowner only meant paying the mortgage, my burden would have been much easier. Unfortunately, taxes, insurance, house maintenance and repairs started to add up.

Half of my savings account was depleted when I needed to remove some troublesome trees. The rest of my savings was spent when I was forced to pay all of my property taxes (plus late fees) at once. Not paying the taxes on time was an oversight on my part, even though I never received a bill due to a clerical error. Nevertheless, I should have been aware of the taxes.

When my heat pump needed two replacements, my finances took another hit. I was not sinking, but I could feel the stress starting to creep in.

After attending a seminar on financial planning, I knew I needed to make some changes.

For adults, most bills and expenses are unavoidable. I have come up with the following guidelines about the challenges of financial planning.

Create a Budget First

You cannot make a solid expense plan without complete and accurate data. First, calculate all of your income, subtract all of your bills and expenses, and then determine how much money is left over.

Pay Off Your Credit Card Debt

Although you may not owe a large amount, make sure you have no credit card debt. If you have more than one credit card, pay off the one that charges the highest interest first. After your credit cards are paid off, start to rebuild your savings account.

Reduce Unnecessary Expenses

Plan to limit your spending on entertainment and unnecessary items for the rest of the year and focus on your financial planning. Once you get used to a certain lifestyle, it is hard to change, but these sacrifices are necessary to pay off debt and replenish your savings. That is better than just “treading water.”

Set Spending and Credit Card Limits

To avoid finding yourself in another tight financial situation after reaching your spending goals, limit your monthly credit card usage to a budget. In addition, set aside a mandatory monthly amount that will be transferred to your savings account.

Use a credit card with a low interest rate and favorable terms, such as cash back rewards. Cash back rewards are a great way to earn extra savings, but they must be handled responsibly. Use that card exclusively and cancel all other credit cards.

It is important to remember that nearly everyone struggles financially sometime, even people who might be considered “well off.” Whether you’re in a small or a large financial hole, realistic and sound financial planning and a good budget is the only solution to improve your situation.



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