NeighborWorks News

Budgeting - What to Include, Why, and Where to Start

Budgeting - What to Include, Why, and Where to Start

Monday, November 13, 2017

What is a budget? A budget is a plan for your money. It allows you to track the money going in and out of your household. A budget can also help you prepare for large or unexpected expenses, encourage savings, identify wasteful spending, and help you accomplish financial goals, such as becoming a first-time homeowner, or improving your credit report.

Why do I need a budget? The single most powerful tool to improve your financial situation is to understand your financial situation – where your money is going and how and why you spend it. By laying out all of your expenses and goals, a budget breaks down the steps to financial improvement into day-to-day spending and savings habits. This will let you take control of your finances in order to accomplish your goals.

How do I create a budget?

  • There are numerous resources and tools that can help you construct a budget, such as mint.com, youneedabudget.com, and others. A more personalized approach can be had by working with a NeighborWorks pre-purchase planner to create a budget that is right for you.

    The basic steps to establish a budget, or spending plan, are as follows.

    • Determine your monthly net income – the amount that you take home each month after taxes, withholdings, etc.
    • Calculate your monthly expenses.
      • Fixed expenses stay the same every month – like rent or a car payment.
      • Periodic fixed expenses are paid periodically for goods and services, like car insurance, water, electricity, etc.
      • Flexible expenses change from month-to-month – groceries, entertainment, and travel.
      • Indebtedness expenses are debt for goods and services bought on credit. Credit card debt, student loans, and car loans are common types.
      • NeighborWorks Tip: It can be helpful to simply record all of your financial transactions for a month or more, so you can see where your money is actually going. Compare this to the expenses you have calculated.
    • Subtract your monthly expenses from your monthly income.
      • If expenses exceed income, plan to reduce debt and increase income.
        • Flexible expenses are often the easiest to reduce – cut back on discretionary spending for entertainment, meals out, etc. Distinguish between ‘wants’ and ‘needs.’
        • Pay down high-interest debts first, especially on credit cards. These debts cost you more the longer you owe them.
      • If your income exceeds your expenses, begin saving.
        • Start with an emergency fund - enough money to cover your basic living expenses and debts for a period of 3 to 6 months.
        • Retirement savings - 401(k) or IRAs are a good place to save money for retirement.
        • Savings for big purchases, like a down payment on a house, or a new car!
    • Evaluate your plan.
      • Which financial habits/circumstances are easiest to change? Which are the hardest? Is a house worth giving these things up?
      • Are you ready to implement this plan right now, or are there other things you want to do first?
    • If homeownership is your goal and it appears to be within reach, set a savings goal: buying a home. Compare your monthly budget against the upfront and ongoing costs of buying a home. These can include:

      Upfront Costs: down payment, inspection, appraisal, closing costs, escrows, reserves, and moving costs

      Ongoing Costs: Mortgage payments, utilities, maintenance and repairs, common charges, and emergency funds.

      Seems like a lot? Get in touch with NeighborWorks! We'll help you step by step to achieve your dreams of homeownership.

Sherrie Arey Selected as NeighborWorks Great Falls Executive Director

Sherrie Arey Selected as NeighborWorks Great Falls Executive Director

Monday, November 06, 2017

Sherrie Arey of Great Falls has been selected as the new Executive Director of NeighborWorks Great Falls, beginning in January, 2018, when current Executive Director Sheila Rice retires. Jim Weber, president of the NeighborWorks Board of Directors, said the local neighborhood development agency, after conducting a national search, found the best candidate right in Great Falls. Arey is currently Vice President for Student Development and Title IX Coordinator at University of Providence.

Arey has completed her Doctorate in Education coursework at the University of Arkansas – Little Rock and earned her Bachelor of Science and Masters of Science at Texas A & M University. She joined the University of Providence in 2014, after 19 years as a university administrator at the College of the Ozarks in Clarksville, Arkansas.

Weber said the NeighborWorks Great Falls was excited to bring Arey to NeighborWorks, noting that she brings a strong management and fund-raising background. “Sherrie has the skills and capacity to lead NeighborWorks Great Falls into the future”, Weber said, “she loves Great Falls and purchased her first home here.”

“I came to Great Falls for a great job, I’ve made a home here because of the great community,” Arey related, “NeighborWorks Great Falls now allows me to serve the community and expand the opportunity for others to find their home in Great Falls, also. I am excited about the future and look forward to building on an already firm foundation.”

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