By: Jeremy Skoglund, VP Trust Officer 

When it comes to my household finances, I get super excited at least 13 times a year. Those times aren’t paydays. I enjoy payday like everyone else, but there are times throughout the year that are even better. One of those times is right now. This is the time each year that I start to work on our budget for next year. Ever since my wife and I got married, I put a lot of thought and time into planning for how we will spend our money in the coming year. We talk through any expected purchases we will be making and plan accordingly. The other 12 exciting times include the end of each month when I compare our actual income and expenses with what we budgeted. I like to see how close I came and whether we have more money than I expected or not.

I’ve always enjoyed numbers, so I apologize to those of you that do not get at all excited even thinking about finances. I don’t expect anyone to go to the lengths that I tend to go when it comes to making a budget and analyzing that budget. What I would like everyone to focus on, though, is the importance of a budget to you, your family, and your kids.

Most of us know how much money we make, whether it is our hourly wage or our annual salary. A lot of people struggle is knowing where all that money goes by the end of the month, and if you don’t have a budget and track your expenses, how would you know where all that money went? You buy a coffee here, fill your car with gas there, buy cookies from the local girl scout, and make your loan payments. Keeping track of everything can be hard. And if you always make your payments and seem to find ways to pay for things, you may think there’s no reason you need to spend extra time keeping track of anything. The problem, though, is that if you do not keep track of anything or have a plan for your money, you don’t know your financial situation until it’s too late. You’ll find out when you try to get a loan for a car or house, and the bank turns you down. Or worse yet, when your car breaks down, or your home is damaged, and you can’t pay to fix it.

The necessary steps for a budget include:

  1. Write down your income or take-home pay for the month.
  2. Write a list of your expenses for the month.
  3. If your income is higher than your expenses, congratulations! The excess can go to additional savings or other expenses.
  4. If your expenses are higher than your income, figure out where you can cut back on your expenses.
  5. Now, track your spending for the month.
  6. At the end of the month, compare your actual spending with your budget.
  7. Repeat for the next month.

I don’t expect you to get to the point that you’re as excited as I am to track your finances, but once you start to realize where all your money goes, you will wonder why you weren’t tracking it sooner.


If you would like more ideas on how to begin creating a budget, please give us a call:


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