Making A Budget
Published August 18, 2025

THE ONE MINUTE TAKEAWAY

Creating a budget for your retirement goals helps reduce financial stress and gives you confidence in planning your future. Start by listing all monthly expenses, then total your net income, using a conservative estimate if it varies. Compare income to expenses and adjust flexible spending if needed to avoid overspending. Review your savings goals and set up automatic contributions, especially through your employer’s retirement plan. If expenses are too high, cut back where possible. Budgeting increases awareness of your finances and helps you stay on track to meet your goals.

Making a Budget

Setting a budget for your goals can reduce the stress of managing your money and give you confidence in planning your financial future. A budget isn’t just about covering your bills; it can also include fun goals like vacations or a new car. And it doesn’t have to be done all at once. You can build your budget step by step.

Write Down Your Monthly Expenses

Start by listing out your monthly expenses. These can include essentials like mortgage or rent, utilities, car payments, groceries, and insurance, as well as non-essentials like dining out, entertainment, and gifts. Don’t forget any debt payments or annual costs like property taxes or premiums. Unsure about your exact numbers? Review credit card statements, bank records, and receipts.

Determine Your Monthly Income

Next, add up your monthly income: this includes your paycheck and any additional earnings. Be sure to compare your gross income (before taxes) with your net income (take-home pay). If your income fluctuates (from tips or commission), use a conservative estimate. If you earn a base salary plus commission, consider using just the base to keep your budget stable.

Compare Your Income and Expenses

Now, compare your income with your expenses. If you’re spending more than you earn, look for areas to cut back. Some costs (like rent or mortgage) are fixed, but others like eating out or shopping can be reduced. Adjusting these categories can help you stay within your means.

Review Your Savings and Financial Goals

Finally, think about your savings and long-term goals. Set up automatic contributions to your retirement account; preferably through your employer so the money is deducted before you can spend it. For other goals, like a college or wedding fund, open a separate savings account and set up automatic transfers from your main account. If your expenses are too high to save, revisit and reduce your spending where possible.

Final Thoughts

Budgeting helps you stay aware of your income and expenses and brings you closer to reaching your financial goals. With just a few steps and small adjustments, you can create a plan that supports both your needs and your dreams now and in retirement.

It may also be beneficial to consult with a financial advisor to ensure your investment choices align with your personal financial goals.

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