coins with a lightbulb on top, in nature

Where’s your money going every month?

In a world where one-click purchases and instant gratification rule, managing your
money might not always be on your priority list.
An estimated 74% of adults have a monthly budget, according to a recent survey. (1)Yet, 84% report overspending.

Been there, done that?
You already know this: You can’t keep overspending forever. If you want to manage
your money better, creating a budget you’ll actually follow can help you now and years
from now.
Whether you’re just starting out or looking to improve your financial habits, these ten tips
can help you take control of your budget and make your money work for you.

  1. Track your income & expenses: The first step in managing your money is knowing where it goes.
    • Track all your income sources and categorize your expenses.
    • Keep it simple. You can record what you spend in a notebook.
    • Or you can use apps or spreadsheets to keep track of how you spend your money.

    This is the best place to start. Why? Knowing how much you’re currently earning and
    spending is important data you need to create a budget.

    • Identify overspending. One recent study found that tracking your expenses is
      an effective way to identify overspending habits, and make adjustments to stay
      within a budget.(2)
    • Manual vs. automated expense tracking. Researchers also found that
      manually tracking your spending habits (in a notebook or spreadsheet) is more
      effective than automated tracking.

    “Automated tracking, with automatic collection of spending data through bank accounts
    or financial tools, is convenient but linked to lower attention and less financial
    self-awareness,” says lead researcher Dr. Yiling Zhang.
    “In contrast, active tracking through manual expense recording requires more
    engagement and is associated with higher financial self-awareness.”

  2. Create a budget: Once you have a clear picture of your financial situation, create a budget.
    • Allocate specific amounts for necessities like rent, groceries, utilities, and
    • Set aside funds for savings and discretionary spending.
    • Make sure your total expenses do not exceed your income. If it does, it’s time to
      look at ways to save money or increase your income.

    Want help creating a budget?
    Check out these free resources from the Federal Trade Commission:

    • Making a Budget
    • Budget Worksheet
  3. Prioritize saving: Pay yourself first. Treat savings as a non-negotiable expense.“Some people get the wrong idea when they hear the term, ‘Pay yourself first,’ says
    best-selling author, investor and entrepreneur Robert Kiyosaki.3
    “They actually hear, ‘Treat yourself first.’ They think it means splurging on things
    frivolously. Instead, the purpose is to make a conscious and purposeful contribution to
    [save and invest].”

    • Aim to save at least 20% of your income, if possible.
    • This can be divided between an emergency fund, retirement savings, and other
      long-term goals.
    • Automate your savings to ensure consistency.
      How’s your saving habit?
    • In a recent survey, 44% of adults said they would have to borrow money to cover
      an emergency expense of $1,000 or more.(4)
  4. Reduce high-interest debt: High-interest credit cards, loans and lines of credit can derail your financial plans to get
    a loan for a house, car or something else.Prioritize paying off these debts as quickly as possible.
    There’s at least two ways to do this:
    The snowball method.

    • Focus on paying off your smallest debts first.

    “Once that smallest debt is toast, roll what you were paying into the next smallest,
    creating a snowball effect,” says best-selling author and financial advisor Dave
    “It’s not about math. It’s about momentum and gaining quick wins. Before you know it,
    you’re knocking out debts left and right, building confidence and momentum like a
    snowball rolling downhill
    The avalanche method

    • Focus on paying off debts with the highest-interest rates first
    • You’ll need to review your debts and interest rates to figure out where to start
    • Credit cards, personal loans, or payday loans typically have high interest rates.
    • Home loans and student loans typically have the lowest interest rates.

    The cost of high-interest debt
    If you have high-interest credit cards or loans, how much are you paying in interest?

    • The average interest rate for credit cards is 22.8%.(6)
    • To put that in perspective, let’s say you only make the minimum payment on a
      $10,000 credit card balance. It would take you about 29 years to pay off the debt,
      and cost you about $19,000.
    • On average, credit card companies charge consumers an estimated $105 billion
      a year in interest.
  5. Cut unnecessary expenses: Review your spending to identify non-essential expenses that you can cut back on.This might include things like:
    • Cancel or downgrade subscriptions for things like streaming services, cell
      phones, software, gym memberships, or consumer goods. One recent survey
      found that consumers underestimate monthly subscription costs by $133.(7)
    • Dine out less often, and cook at home instead.
    • Limit impulse purchases. If you’ve done the work to track expenses and budget
      your money, you know how much you have (or don’t have) for impulse
    • Change your entertainment habits: Instead of paying for movies, concerts,
      theme parks, and shows, find less expensive alternatives you can enjoy.
    • Lower your energy bill by turning off lights, unplugging electronics, and using
      energy-efficient lights and appliances.
  6. Plan for major expenses:
    What are you going to do if your refrigerator fails, your car breaks down, or you’re hit
    with medical bills not covered by insurance?If you don’t have a financial plan to pay for major expenses, you could be in trouble.
    It’s not a matter of if you’re going to need money for a major expense, but when. And
    you can do something about it.

    • Anticipate and plan for large, irregular expenses like car repairs, medical bills, or
    • Set aside money each month in a designated fund for these costs.
      When something does happen, having money set aside will make the situation a lot less
  7. Use credit wisely: Credit cards and loans can be useful financial tools if used responsibly. Here are a few
    ways to keep your spending habits in check when it comes to credit:

    • Always pay your balance in full to avoid interest charges. Research shows that
      only 38% of adults pay off their credit card balance every month.(8) And that can
      get expensive (see #4 & the cost of high-interest debt).
    • Use credit cards for convenience and rewards.
    • Never spend more than you can afford to pay off each month.
  8. Build an emergency fund:
    An emergency fund is crucial for financial security.
    You can’t predict when something might happen that could impact your income, like:

    • Job loss
    • Injury or illness
    • Natural disaster or pandemic (An estimated one-third of adults lost jobs and
      income during the COVID-19 pandemic.(9)

    Having money set aside in an emergency fund will help you get through situations like

    • Aim to save three to six months worth of living expenses in a separate, easily
      accessible account.
    • If that sounds like a lot, start by saving for one month of living expenses.
    • This fund can cover unexpected expenses like job loss or medical emergencies,
      preventing you from going into debt.
  9. Review & adjust your budget regularly:Your financial situation and goals may change over time, so it’s important to review and
    adjust your budget regularly.

    • At least once a month, compare your actual spending to your budget and make
      any necessary adjustments.
    • This helps ensure you stay on track and continue to meet your financial goals.
  10. Get help from a professional:
    If you’re struggling to manage your finances, don’t ignore your money problems and
    hope they’ll get better on their own. Instead…

    • Get help from a financial advisor or debt management professional
    • Depending on your situation, it might make sense to talk with an attorney,
      accountant, or tax advisor, too.

    These experts can provide personalized guidance based on your specific situation and
    help you develop a long-term financial plan.
    Budget-friendly habits make a difference
    Here’s the big reason following a budget makes a difference…

    • Poor financial habits can strain relationships, increase stress, negatively impact
      overall health, and contribute to low satisfaction with life.(2)

    But it doesn’t have to be that way.
    By following these 10 tips, you can create a budget that works for you, reduce debt,
    build savings, and achieve greater financial stability.


      1. Marder, A. (2023). Most Americans Have a Monthly Budget, But Many Still
        Overspend. Nerd Wallet. From:
      2. Zhang, Y. (2023). Financial Self-Regulation: How Does Expense-Tracking Inform
        Financial Behaviors? Consumer Interest Annual, 69:
      3. Kiyosaki, R. (2023). Always Pay Yourself First. From:
      4. Gillespie, L. (2024). Bankrate’s 2024 annual emergency savings report. From:
      5. Ramsey. D. (2024). Total Money Makeover: A Proven Plan for Financial Peace.
        Thomas Nelson Publishing. From:
      6. Martinez, et al. (2024). Credit card interest rate margins at all-time high. From:
      7. C+R Research. (2022). Subscription Service Statistics and Costs. From:
      8. Backman, M. (2023). Only 38% of Consumers Pay Off Their Credit Card Bills in Full
        Each Month. From:
      9. Hrynowski, Z. (2020). COVID-19 Disrupts 30% of American’s Jobs or Finances.

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