Though we're well into the New Year, it's never a bad time to start a resolution around budgeting.
The first step in creating a budget for yourself is identifying the three spending categories from your bank statements...the first being the essentials.
"Those fixed costs, those things that absolutely have to be paid. The rent, mortgage, utilities, you know, those things to maintain just living," said Treasure Valley 1st Federal Bank Senior Treasury Management Officer Brian Gonzalez.
The second tier would be something called optional obligated costs.
" This is like your cell phone, your cable bill, your gym memberships. Those things that you like to have but don't necessarily need to have," said Gonzalez.
The last would fall under the completely optional category. These are wants, not needs.
"Those things that are nice to have. Your coffees, your breakfast, your eating out, your dining, your entertainment," said Gonzalez.
Once you've done that, you'll have a better idea of where you can cut costs. But during that process, or even before, it's important to set goals.
"Whether it's paying down a credit card, or whether it's saving for a vacation, or whether it's something that I want as a goal to be able to do, and that will give you that more kind of layout of, ok, how much is that going to take in order to do that?" asked Gonzalez.
Making those goals is the easy part.
"But are you holding yourself accountable to that and making sure that you're reviewing that budget on a daily basis or, it looks nice on paper, but what are the actions that I'm taking to, you know, make sure I reach those goals and have those parts in place," said Gonzalez.
And it's easy to forget about the bills we don't see on a regular basis.
"Insurance premiums might be quarterly, property taxes may be once a year, so kind of thinking about all those things from the entire year too cause you gotta budget for those as well," said Gonzalez.
But if you find yourself charging everything and have accrued debt on several different credit cards, try to tackle them one at a time while knocking out your minimum payments on the others.
"It's much more effective to just knock those balances down as much as possible, and if it has to be done one at a time, I think that's an easier approach for people to comprehend. Plus, you get that sense of achievement once you kind of get this one out of the way and then you can focus on the next one and focus on the next one," said Gonzalez.
Lastly, make sure to be checking your statements regularly not only to hold yourself accountable, but to watch out for potential thieves.
"I always recommend people look at their accounts daily, more for the fraud prevention piece of it just to make sure that there's not anything unauthorized or not anything that you're not expecting on there. The maximum, daily, but the minimum, it should be every statement that you're getting, that you're reviewing to make sure that there's no fraud and you're not paying for anything that you're not using," said Gonzalez.
