You and your budget: Live within your means

Text size: aA aA aA
By creating and following a budget, you may have a better chance of reaching certain financial goals — and budgeting may not be as difficult as you think.

Budget basics — Getting organized

A budget is simply an estimation of your monthly income and expenses. Following your budget means striving to earn and spend close to what you estimated.
To make a budget work, you need to record where all of your money goes. One way to do this is to save your receipts from every purchase you make, whether it be with credit cards or with cash. If you pay in cash and the store doesn't give you a receipt, request one. Also, keep an accurate record of any checks you write, and log in to your account on your bank's website to make sure that withdrawals reflect your purchases.
Periodically, spend an hour or two going through your receipts and bank transactions. Record those expenses in budget categories, such as groceries, entertainment, automobile repairs, vacations, savings and investments, mortgage payments, taxes, charitable contributions, and any others you deem necessary. The more budget categories you create, the more accurately you can track your expenses and determine areas where you may be spending too much or too little.
At the end of each month, see how your actual spending stacks up against your budget. You may want to adjust your budget if your actual results deviate significantly from your original estimates.

Save time with computer software

If you would like some guidelines, consider purchasing financial planning software, such as Intuit's Quicken or Microsoft Money. Either package could help you save time — and maybe money — in computing your monthly budget.
With the software, all your expenses are entered into simulated check registers where you allocate each expense to a budget category. You can create monthly or annual budget reports that automatically update each time you log in money spent or received. You can also correct an entry you made months ago and your current balance will be recalculated automatically.
Yes, budgeting will initially require some extra work and organization. But a little extra effort now can go a long way toward helping you target your financial goals.

© SS&C. Reproduction in whole or in part prohibited, except by permission. All rights reserved. Not responsible for any errors or omissions.

The material was authored by a third party, DST Retirement Solutions, LLC, an SS&C company ("SS&C"), not affiliated with Merrill or any of its affiliates and is for information and educational purposes only. The opinions and views expressed do not necessarily reflect the opinions and views of Merrill or any of its affiliates. Any assumptions, opinions and estimates are as of the date of this material and are subject to change without notice. Past performance does not guarantee future results. The information contained in this material does not constitute advice on the tax consequences of making any particular investment decision. This material does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation, offer or solicitation for the purchase or sale of any security, financial instrument, or strategy. Before acting on any recommendation in this material, you should consider whether it is in your best interest based on your particular circumstances and, if necessary, seek professional advice.

Because of the possibility of human or mechanical error by SS&C or its sources, neither SS&C nor its sources guarantees the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall SS&C be liable for any indirect, special or consequential damages in connection with subscriber's or others' use of the content.
Banking products are provided by Bank of America, N.A. and affiliated banks. Members FDIC and wholly owned subsidiaries of Bank of America Corporation.
Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.