Budgeting

"People don't plan to fail, they just fail to plan." This paraphrased wisdom from Benjamin Franklin—whose portrait still graces the U.S. $100 bill—applies today to managing money and increasing saving and investing.

Overspending leads to unnecessary expenses like late fees, overdrafts, and over-limit fees. A budget helps you determine how much of what you make you keep.

What makes up a budget?

Suggested spending percentagesStart by pulling your bank statements for the past two months and go through each check or debit line by line. Then download this worksheet and plug in your spending.

  • Fixed expenses: Bills you pay every month that don't change. Examples: your mortgage or rent, car payment, student loan, cable bill, cell phone, etc.

  • Variable expenses: Bills that fluctuate on a month-to-month basis, depending on how much of that item you've used. Examples: utilities, gas, food, credit-card payment, etc. This category includes unnecessary fees you can avoid, such as late fees, non-sufficient funds fees, payday lending charges, over-limit fees, and annual credit card fees.

Monthly Expenses

When a household has more income than expenses, it should have a surplus that can be placed into a savings or investment account. If a household's expenses exceed income, it usually is carrying debt. 

Out of sight, Out of mind

Make savings a priority by paying yourself first. Before you pay your bills or buy groceries, set aside your portion of income to save. Experts say you should save 2% to 10% of your income every month. Too tight for you right now? Try a lower percentage and work your way up month after month.

Look for Leaks!

As you track your dollars, re-evaluate your spending habits and look for ways to save. Dupaco's free Money Makeover can help you identify opportunities where you can pay less and save more. 

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