7 Steps to Building a Budget

Finances are an extremely important part of life. For parents or caregivers, it can be extremely helpful to navigate increased costs through budgeting. Evaluating current finances and planning for the future can help parents feel well-prepared and may alleviate financial stressors. 

Below are some tips that may help you create a financial budget:

1. Estimate Your Child’s Long-Term Needs: 
   This can be a great place to start when dealing with finances. Doing this will allow you to understand which different types of costs your family may be looking at. It may also be helpful to reassess these needs annually, as they may change. Important things to consider here include whether or not your child will attain a secondary education, a job, independent housing, etc. 

2. Assess Your Current Financial State: 
   Completing this may be extremely helpful as it can help you determine what areas you do or do not need support in. An excellent way to assess your financial state is by calculating your net worth. 

3. Determine Goals: Yearly, 5-Year, and Long Term: 
   Placing different goals for your family to work towards will allow you to spend and save your money with purpose. What would you like to spend in the next year, five years, or ten? What would you like to save within the next year to be able to afford the next five years?

4. Create a Savings Plan:
   Using the information you know about your current financial situation and your future financial goals, create a plan in order to accomplish them. This can be as detailed as you desire to help stay on top of things. Keeping an emergency fund (if possible) in place is also something you may find helpful, as well as adding strategies for reducing any current debts into your plan.

5. Keep Track of Everyday Spending:
   Trimming expenses can begin from the smallest actions and still have great impacts! You may find that documenting your everyday expenses such as groceries, gas, transportation, and others can help you locate where you can spend less or even cut out certain costs.  

6. Review Resources:

   Ensuring that you have the correct understanding of all of the resources available to you is essential. For example, your insurance, depending on your employment status, can help you make the most of the benefits that you may receive. Researching assistance options through your insurance and state may allow you to see those benefits. You can also review government benefits, grants, and scholarships. Additionally, if you have school-age children, it can be helpful to reach out and see what resources and support the school may provide. They may provide help with assistive technology for your child, and more. 

7. Consider Long-Term Steps:
   Completing this may ensure that you are adequately prepared for the future. For example, you may decide whether or not your child will make decisions for themselves once they turn 18. Additionally, it can be helpful to keep different housing resources in mind that you may want for your child so that you can save accordingly. 

For more tips on financial planning, visit our Financial Planning Guide here.