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Financial wellness: Goals and budgeting

  1.  Set your financial goals.  

A successful financial future starts with evaluating your current financial situation and setting goals.

  1. Create at least one short-term and one long-term financial goal.
    • A short-term goal would be something you want to achieve within the next 12 months.
    • A long-term goal should take over 12 months to achieve. Make sure your goals follow SMART goal guidelines.

  2. Create a budget.  

After setting your goals, the next step is create a budget. A budget is used for planning your weekly, monthly, or annual spending. It will help ensure that you are on track to complete your goals and will help you avoid excess spending.

  1. Understand your income. In order to understand your income, you need to know how much money you have on-hand and how much money you make. To calculate how much money you make, add up all of your monthly take home pay. Add in any other sources of income to this sum as well.
    • You can get this information from your paystub (or in myHR).
    • If you need extra help with calculations, you can use the Paycheck Calculator from ADP to easily add up your take home pay. Make sure to select Missouri at the top of the calculator.
  2. Understand your expenses. The best way to understand your expenses is to track them. This will help you identify how much you are spending and what areas you may be able to cut back on.
  3. Evaluate your expenses. After tracking your expenses for one month, go over the things you spent money on and divide them in to two categories: "needs" and "wants. You can use the CashCourse needs vs. wants worksheet to help separate your expenses into wants and needs.
    1. What you need: The things that you can’t live without. These typically include all consistent recurring expenses such as rent/mortgage payments, your household bills (like electricity or Internet bill), loan payments, and insurance. It also includes necessities like food, clothing, and transportation.
    2. What you want: These are the things you can get by without having. Examples include eating out, purchasing new gadgets, or going to the movies. It’s important to remember that one person’s want may be another’s need. For example, if you live in a big city with good public transportation, a car could be considered a want, whereas someone living in the country may need a car to get around.
  4. Total your expenses. Add up all of your expenses for the month and make sure they are less than your monthly income. If your expenses are greater than your income, you will need to decrease your expenses or increase your income.
    • To decrease your expenses, start by decreasing the money spent on your wants. If you need to decrease your expenses further, you should focus on lowering your spending limit for variable expenses such as food and clothing.

Once you have adjusted your spending so your income is greater than or equal to your expenses, you are ready to create your spending plan.

Online budgeting program
  • BalanceTrack – A step by step guide to help walk you through creating a budget. This resource also provides budgeting worksheets.
  • CashCourse Budget Wizard – A free budgeting program. Please note, you will be required to make an account.
  • Mint.com – A free program for budgeting, paying bills, and checking your credit.
  • EveryDollar – A free budgeting program developed by Dave Ramsey. This resource also provides an upgraded version, which costs $99 a year and includes the ability to sync your bank accounts.
  • You Need a Budget – A user-friendly budgeting program for computers and smartphones. This resource costs $50 a year, but includes a risk-free trial.

  3. Make a spending plan.        

A spending plan will put your expenses and income together in one place, making it easy to allocate your dollars to specific expenses. This will help you understand where your money is going and help you achieve your financial goals. The core concept for a spending plan is to:

  1. List your total income and total expenses.
  2. Allocate your income dollars to cover each expense.
  3. Assign remaining income (savings) to your savings account and/or goals.
    • A good practice when creating a spending plan is to give every dollar a job, meaning that every dollar is assigned to either an expense, the repayment of a debt, or to your savings.

There are a variety of free and paid resources available to help you create a spending plan. A few options are listed below.

Free spending plan printable worksheets

Reviewed April 05, 2017.