If you’ve struggled with spending more than you earn then you should know you’re not alone. The good news is, with a bit of focus and intention, it’s possible to break this cycle of overspending. Let’s talk about how you can regain control of your finances with actionable steps based on practical and basic budgeting principles.

1. Create a Budget

While not always an exciting topic, a budget is the foundation of financial wellness and it’s never too late to start one. 


Start by examining your income and expenses to understand your financial situation clearly. This involves tracking all money coming in and going out and categorizing your spending habits at the monthly level and at the yearly level, if possible. 


Once you identify where your money goes, then you can look for areas to cut back or ways to increase income. This clarity helps set the stage for achieving long-term financial goals.

2. Track, Trim, and Target

When you start tracking expenses, it often reveals surprising patterns. Small, seemingly insignificant purchases—such as your daily coffee, snacks, or impulse buys—can add up significantly over time. 


Begin by trimming these areas rather than cutting them out entirely. For example, brew coffee at home instead of buying it daily. By being realistic and making manageable adjustments, you can free up funds for savings or unexpected costs without feeling deprived. Once you’ve identified the freed-up funds, you can start allocating these to your financial goals (such as debt payoff, establishing an emergency fund, or saving for a down payment).

3. Use Spending Guidelines as a Framework for a Budget

Consider allocating your income across major spending categories to maintain a balanced budget. For example, your allocation could look like this: 


  • Housing (35%): Includes mortgage or rent, taxes, utilities, and insurance.

  • Transportation (15%): Covers car payments, fuel, insurance, and commuting costs.

  • Debt (15%): AllocatDRAFT:e this portion to paying off credit cards, student loans, or personal loans.

  • Savings (10%): Prioritize building an emergency fund and long-term savings.

  • Living Expenses (25%): Includes groceries, vacations, and clothing.


These percentages serve as a guideline and may require adjustments based on your circumstances, such as higher living costs in urban areas or creating other categories like charitable giving.

4. Prepare for the Unexpected

One of the most critical aspects of financial wellness is resilience. Tracking your finances consistently helps you anticipate unexpected costs, whether it’s a major car repair or unexpected dental emergency. A realistic and flexible budget gives you peace of mind, but helps you identify ways of saving so you can weather potential financial storms. 

5. Leverage Expert Resources

Finally, organizations like GreenPath Financial Wellness and Space Age Credit Union offer a library of tools and advice that help individuals achieve financial stability.You can access resources for budgeting tips, debt management strategies, and much more, plus find out how our checking and savings options can support your financial goals. 


Find out more by contacting Space Age Credit Union today!