Financial Wellness: Planning a Budget

If you’re hoping to gain more control over spending and begin working towards your financial goals, you need a budget. A personal or household budget is an itemized summary of expected income and expenses for a defined period of time, typically one month. While the word budget is often associated with restricted spending, a budget should really mean more efficient spending.

Why make a budget?

A budget will show you how much money you expect to bring in against all of your expenditures from the required expenses, like house payments and rent to discretionary spending like entertainment. Instead of viewing a budget as a negative, you can view it as a tool for achieving your financial goals.

What a budget does

As a personal financial planning tool, a written, monthly budget allows you to plan for how you’ll spend and/or save your money each month and also keep track of your spending patterns. Though making a budget may not sound like the most exciting activity (and for some, it’s downright scary), it’s vital to keeping your financial house in order as budgets rely on balance. If you spend less in one area, you can spend more in another or choose to save that money for a larger future purchase, building a “rainy day” fund, or even for retirement.

Creating a budget

Before you begin to make your budget, it’s important to realize that in order to be successful you have to provide as much detailed and accurate information as possible. Ultimately, the end result of your new budget will show you where your money is coming from, how much is there, and where it’s all going each month.

If you are like many Americans, you may find that you are spending more than you’re saving and steadily going deeper into debt as a result. This is an easy and common pattern to fall into, and you’ll need some careful planning and discipline to reverse it.

The first step is to create a budget by examining your income and expenses to determine exactly how much money you have coming in and how you’re spending it. Once you’ve got a clear understanding of your current budget, the challenge is to find places where you can spend less (or earn more) in order to achieve your financial goals.

Question your needs and wants
What do you want? What do you really need? Evaluate your current financial situation and make two lists — one for needs and one for wants. As you make the list, ask yourself the following:

  • Why do I want it?
  • How would things be different if I had it?
  • Which things are important and essential to me?

When your list is complete, reevaluate what qualifies as a need before making any purchases that will impact your budget.

Set guidelines
Keep your budget balanced with wants and needs by setting clear guidelines. If you splurge on a vacation, consider cutting other costs that month to offset that large expense.

Track, trim and target
Once you start tracking, you may be surprised to find that you spend hundreds of dollars a month on eating out, entertainment or other discretionary expenses. To lower these costs, target areas where you can cut back on spending. Remember that reducing expenses is often a more realistic approach than cutting costs entirely.

Rework your budget regularly

As your finances change, it’s important to adjust your budget. Whether you’ve received a raise or started a family, track your current expenses and make adjustments as necessary.

 Budgeting guidelines

When trying to set a budget and economize, one is limited by one’s future earnings. If expenses continually exceed earnings, one has to borrow money to pay expenses. Eventually, one reaches a point when it becomes impossible to eliminate debt, which may lead to bankruptcy. A few rules can be used as guidelines in cash-flow management to help formulate your goals and priorities.

Table courtesy of Financial Planning Association © 2019

In setting your own goals and priorities, if any of your planned (or actual) expenses exceed these guidelines, then perhaps that is an area you need to reconsider.

Kline Galland’s Chief Financial Officer, Tracey Groscost says, “The best gift you can give to yourself and family is a realistic look at your finances.  What you earn, what you spend, where you spend it and how much debt you have.  It’s hard to move in the right direction until you determine your true starting point.  Once you have a starting point, it is possible to achieve financial wellness, one step at a time.”

For this information and more, visit the Financial Fitness Center within our Kline Galland Employee Assistance Program (EAP) through UNUM. Our EAP has useful information and resources regarding employee wellness issues regarding your health, emotional well-being, financial training and information, legal assistance, addiction, personal growth and so much more!  They offer webinars, forms and templates, live assistance and counseling from their licensed counselors and a wealth of other information to meet your wellness needs.  Please visit today at or call 1-800-854-1446 (multi-lingual); available 24/7.