Financial Fitness Zone

How to find more room in your summer budget

Maybe you missed out on the New Year’s resolution craze, perhaps you skipped spring cleaning ... but there’s still hope for your 2014 finances! Just as many people work to get into shape for summer, here are some tips for a summer budget makeover.

Look at Where You Are

The beginning numbers can be depressing, but they set the benchmark for the makeover. Just as getting on the scale at the beginning of a weight-loss journey can be scary, so can taking an in-depth look at your finances. But it also can get you motivated to improve.

If you haven’t already, compile the numbers. Whether you do this in a notebook, spreadsheet, website or app, the important thing is to get a look at what you are spending and where. Sometimes you can trip yourself up by worrying about the exceptions, like this month was extra expensive because we had several weddings, a vacation or some other bigger splurge. So try looking at the past three months, six months or year, and include all the expenses.

Then write down all the money you have coming in. Again, there can be temptation to leave off certain things — like a bonus or a tax refund. But it’s a good idea to include all of that so that they money is put toward meeting your financial goals.

Determine Where You Want to Be

Speaking of those goals, that’s the next step. Outline the things you want to accomplish financially. If you are part of a couple, it’s a good idea to do this separately and then discuss together.

Think about where you want to be in the short term and the long term. This could mean that in two months, you want to have started an emergency fund, in five years you would like to have a down payment for a home and in 35 years you would like to have enough money to retire.

But don’t forget about even smaller goals, like remembering to look over your credit card bill every month to make sure it is correct and to monitor your spending. These are goals that you can achieve even if money is tight and small victories can keep you going! Monitoring your credit is also a smart task to undertake while you revamp your budget. If you want to buy that house in the next few years, starting to work on your credit now can get you a lower interest rate and save you thousands (seriously, tens of thousands) in the long run. You can monitor your credit scores for free every month on, plus set goals and track your progress.

Take the First Step

Once you’ve outlined your goals (and, if you are part of a couple, agreed on joint goals), it’s time to plan how to achieve them. This can include picking expenses to cut down on, finding new ways to increase income and prioritizing those goals. You’ve made over your budget and it’s time to put it in motion. Summer weather can be oppressively hot and it’s nice to get one weight off your shoulders.

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