Want to Start Budgeting in 2025? Here are 5 Steps to Get You Started
Achieving financial success is a common goal. Yet, it is often difficult for many. The key lies in effective budgeting. It’s a crucial skill that can help you reach your financial goals. From setting clear financial goals to smart spending, these tips will help you navigate your financial journey. Let’s start budgeting in 2025 with these tips for financial success!
1. Look at Your Spending & Expenses
The first thing you do when starting a budget in 2025 is to look at how much you spend on things, as well as how much money you bring in. A great way to do this is to open a spreadsheet or use a budgeting app and input all major expenses and income. Fo, you may start with bills like rent, car payments, subscriptions, gas, regular doctor appointments, internet bill, and similar bills that you have. Then, list your income. This is how much you bring in from the job(s) you work, as well as other passive income or anything else you may bring in.
Once you have listed each of these things out, it is time to evaluate. Ask questions like this:
- Is there a category I am spending too much money in?
- Is my income where I want or need it to be right now?
- Do I have any unnecessary subscriptions or other things I am paying for?
- Could I be putting more money to more important things, like savings or investment?
- Do I need to add anything to my list of expenses, like frequent doctor appointments or haircut appointments?
After evaluating and noting what adjustments you want to make, it is time to create your budget.
2. Consider a Zero-Based Budget
Now that you have evaluated your monthly income and expenses, you know the amounts of money you should put toward certain things. For example, you saw that you consistently spend about $90-110 a month on gas. So, your budget might be $100 for gas each month.
Do this with each expense and give it a certain amount you think you should spend on it for that month. It is important to not, however, that the first few months of budgeting will be a learning curve. Expect to make changes and adjustments until you find a good rhythm.
A great way to budget that many find easy and enjoyable is the zero-balance budget. This technique ensures that each dollar you make each month goes toward something and has a purpose. This method can help you ensure that you’re not overspending in any category because it forces you to think about every dollar of your income.
Research different ways and techniques to budget and find what works for you. Each person has different techniques. Whatever you do, make sure that you are budgeting wisely and meeting your financial goals. Consider using UCCU’s digital banking tools to help!
3. Set Goals
Setting financial goals is your roadmap to success. Begin with defining both short-term and long-term objectives. For example, a short-term goal could be saving $500 for a road trip you are doing in 5 months. A long-term goal could be saving up a down payment for a house you want to purchase in the next 3 years.
Consider using the SMART criteria when making your goals: Specific, Measurable, Achievable, Relevant, and Time-bound. Following this will help your goals be more realistic and attainable.
Put this goal somewhere you can easily access it and consider checking on how you are progressing with your goals each month. Goals will help you stay on track financially and make sure you are working toward something. This can be a great motivation to be financially smart!
4. Prioritize Debt Repayment
Reducing debt is crucial for financial success. Focus on high-interest debts first to minimize payments. Creating a specific plan for repayment can accelerate your progress.
Consistently dedicate a portion of your budget to paying down debt. This approach not only reduces stress but also frees up more money for savings. Know that it might take a white to pay off some of your debt, but if you set a good plan to accomplish it and follow it, you will pay it off successfully.
If you want to learn more about different ways to pay off debt, read this blog!
5. Involve Your Family in Budgeting
Including your family in budgeting fosters teamwork and understanding. It ensures everyone is on the same financial page. Discuss goals and expenses openly to make informed decisions together. This involvement can strengthen your family’s financial literacy.
Additional Tips
There are so many things you can do with budgeting, as well as many things to remember. Here are some additional tips and steps you can take with budgeting:
- Don’t get discouraged: Remember that budgeting takes time and you might need to adjust your methods the first few times. Keep trying until you get it right for you.
- Add unique budgeting categories: You can make your budget unique to you and add different categories to help you. For example, some people have a category called “Miscellaneous” because sometimes random extra little things happen in a month. Married couples sometimes have a “mad money” category that each spouse can do it for and not have to worry about it affecting the family budget. Make your budget fun and purposeful!
- Underestimate income & overestimate expenses: Doing this can help you stay encouraged because you might end up with a little more surplus than you thought. Doing this is better than underestimating your expenses and overestimating your income, which means you will likely come up short.
- Differentiate between needs & wants: Doing this can be a skill, and one that needs to be practiced to become a habit. Doing this can save you a lot of money and stress. Here is an example of how you can build this habit.
- Stay informed about new budgeting trends and technologies. Embracing innovation can enhance your budgeting skills. This approach ensures you remain adaptable and well-equipped for future financial landscapes.
Financial Success in 2025
Achieving financial success requires a commitment to smart spending and consistent budgeting. These practices form the foundation for a secure financial future. Taking action now can lead to fulfilling your financial ambitions when you start budgeting in 2025!