Understanding the Basics to Budgeting

The Good Stuff

....To reach your financial goals, or at least get you on the right track. This brought up the topic of setting goals and we have some essential suggestions to consider when creating your goals. First, we want to emphasize the importance of writing your goals down. There is a multitude of research that shows why this is so important. We also want to share with you the acronym SMART. SMART goals make sure that our goal setting is effective and provides us with the best chances of reaching them.

Specific - Define specific goals

Measurable – Make sure you can track your progress

Attainable - Set goals that will challenge you, but that are possible along with small goals along the way

Relevant - Make sure your goals have meaning, a goal that you don’t care about will be hard to reach

Time oriented - Always set a time frame to hold you accountable

We also explain the three step budgeting process that Powercat Financial uses with K-state students. This process is extremely beneficial as it shows you exactly what your cash inflows and outflows are. You can find more information on this at the Powercat Financial website: www.k-state.edu/powercatfinancial, however, we want to reiterate this one more time here.

Step 1. Estimate your monthly income and expenses.

  • It is important to place each expense in its own category and note whether it is a “need” or a “want”. This will allow you to identify areas that can be adjusted in step 3.

  • Do not skip this step as it is critical to showing you just how in-tune with your finances you are.

Step 2. Track your cash flows

  • Keep a record of your income and spending for the month and compare to your estimates at the end of the month.

Step 3. Adjust your budget going forward.

  • Adjust your budget to lower some of the categories you determined as “wants” in Step 1.

  • Add in savings as an automatic expense so you don’t spend the money you wanted to save.

"Money Tip of the Week”

Keep a small amount of cash in your vehicle for emergencies! This is a great way to be sure you never get stranded with no resources.

As always, we hope you found this beneficial! Don't be shy and please spread the word about School Smart, Money Stupid. We are now found on Apple Music and Spotify