The holidays have passed and the credit card bills are coming in. If you’re like many, a slight sense of panic may be setting in! Or perhaps your budget just feels like it’s been derailed and needs to get back on track. January is the perfect time of year to review and/or develop your family’s budget. It’s a new year, a fresh start! So, how do you get started?

We recommend that you begin your budget by tracking your expenses. Tracking is a simple exercise that lets you see just where your money is going. So, every time you spend money (for gas, groceries, entertainment, etc.), write it down. You’ll want to do this for about three weeks. At the end of each week, total your spending.

You may be surprised at what you find, and you may be able to identify some ways to cut back. For example, instead of spending 50 cents on sodas at work, buy a case of soda and bring it to work. (At 50 cents per can, that’s $12 per case!)

Once you’ve identified what you spend money on, it’s time to move to the next step. List all of the items that you spend money on throughout the year. You can either do this on your own, download a sample budget from the SHARE website (Microsoft Excel format), or check out other sample budgets on the Internet.

Your next step is to determine what it is that you spend in these categories each year. When you have amounts for each category, divide that number by 12. That’s ideally what you need to have each month to cover those expenses.

Now, some of the things on your list will be things that happen sporadically (car repairs, vacation, back-to-school, etc.) and these are the things that you would save for each month. “Fixed” items (rent/mortgage, car payments, credit cards, etc.) are items that you pay monthly by check or money order. The last category includes things that you should pay for with cash (e.g. groceries, entertainment, gas, pet supplies, etc.)

While the media continue to promote a “cashless society” through the use of debit/credit cards/checkbooks, studies continue to show that using those items results in increased spending of 30% or more. We just simply think differently when we use cash—generally to our benefit!

You’re now ready to develop your Spending Plan, or budget. The plan should cover pay period to pay period and shouldn’t project out too far. Again, there are a variety of forms available for use. You can download one from the SHARE website that works quite well (Microsoft Excel format) and divides the plan into cash categories, bills to be paid within the pay period, and savings.

I’ve used my Spending Plan for seven years now, and it’s a lifesaver! Life is busy, and having a written plan means I take it out, pay what it says to, get cash for my envelopes and transfer what I need to save into savings. My family has been able to do so much more than we ever thought we could, and I can’t imagine life without it.

If you’d like more information about developing a budget, please feel free to e-mail me at blison@gbdioc.org . In northeastern Wisconsin you can also call Catholic Charities toll-free at 1-877-500-3580. Good luck with establishing your family’s budget and experiencing a greater sense of peace and well-being!