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Is budgeting part of your new year’s resolution? Getting smarter with money starts with a SMART goal that’s specific, measurable, achievable, relevant, and time-bound. Whether it’s buying a house, starting a college fund, or just getting out of the paycheck-to-paycheck cycle, a goal is your first step. 

Are your money goals clearly defined? Can you measure their progress? Are they realistic? Do they have a timeline that keeps you engaged and accountable?

You can’t achieve any goals without a plan. So the financial experts at Dundee Bank weighed in on why it’s so important to have a budget to achieve financial goals of any size.

What kind of goals should you start with for budgeting? 

Everyone lives life differently and goals are all unique to your situation, so there’s not a black and white answer. Start by thinking less about money, and more about life goals. Maybe you want to help your kiddos pay for schooling one day. Maybe you want to travel, open a business, or simply upgrade your car. Maybe you just need $500 set aside for emergencies.

It may be trial and error to find what works best. For beginners, it is helpful to list out all of your monthly bills including:

  • Rent/mortgage payment
  • Utilities
  • Gas
  • Food
  • Entertainment
  • Insurance
  • Credit card payments (and when they are due.)

After you have detailed your expenses, you can subtract your expenses from your income and this will give you an average of how much you can save monthly.

For most people, small goals, medium-sized goals, and long-term (big) goals are important to set in place. Achieving small goals along the way can keep you motivated to continue to reach medium-sized goals and long-term goals. It can be hard to stay focused on goals long-term, so it is important to continually hit smaller goals to scratch that itch.

“When I was 22, I was focused on being able to purchase a home one day,” said one Dundee Bank team member. “When I turn 40, I am sure more of my goals will be focused on plans after work and how to get there. I think it’s important to know that goals change often.”

“A financial planner might argue that if I thought about life after work when I was 22, it would be easier than when I am 40, so it is important to always be open to focusing on a future. My wife would tell me that I need to focus more on the present though, and remember that vacations are important right now to spend time with the kiddos instead of having a lump of cash down the road. There’s no right or wrong answer!”

Is budgeting hard? 

Committing to a budget can be very difficult—experts compare it to sticking to a diet. 

Making sure to reward yourself for small wins is important. It can be a slippery slope falling off a budget. This time of year, people exercising “dry January” know this all too well!

As with any goal, it’s important to remind yourself that you are human, and these things can be challenging. Similar to a diet, it is important to not have it take full focus of your life. The budget is in place to avoid stress, not add to it!

Should everyone be budgeting?

The financial experts on our team agree: Everyone should budget. 

Putting together a well thought-out plan will help you become more financially independent as well as improve your financial well-being. You could compare it to monitoring the items you eat to maintain good health, studying for an exam, or even projecting a future purchase and placing small milestones along the way to achieve it. 

A budget gives you an outline to reach financial goals, even if they are small. 

Do wealthy people stick to a budget too?

Absolutely. Similar to anything in life, our team agrees that practice is important. 

You can’t wake up one day and decide to be wealthy and expect to immediately become wealthy. Building wealth is a slow, daily process that takes time. Instant gratification is something you should not expect with a budget or wealth.

However, a budget is the first step to building wealth.

How can my bank help me stick to a budget?

The bank is your partner, we want to see you succeed.  We can do this on various fronts, but a great first step is to establish a savings account. No matter your goal, setting up an automatic transfer on your payday to move funds to your savings account makes the process easy to start and maintain. (Out of sight, out of mind.) 

Say your goal is to save $500 and start earning some interest and let your money work for you.

Open a savings account, set up payday transfers, and once you have saved $500, talk to us about moving those funds to a certificate of deposit to earn an even higher rate. 

Next thing you know, you’ll be well on your way to achieving goals with smarter money.

Ready to set up a savings account to work toward your goal? 

Opening a savings account is easier than ever.

Click here to open an account online, or come see us at any of our three branches in Dundee, Blackstone, and Little Bohemia.