Reassess Your Budget

June 23, 2025

We’re halfway through the year, making it an excellent time to evaluate your spending and saving habits. We’ve compiled a helpful midyear checklist to review as you reassess your financial situation.

Steps for Setting a Budget and Reviewing Expenses

Schedule a time to sit down and review your total expenses and income over the last six months. You may be surprised at the total amount you have spent in each area. Studies have shown that after simply viewing the amount spent in discretionary areas, you may be motivated to spend less. Viewing your expenses broken down into categories such as restaurants, groceries, subscriptions, shopping, and more can help you gain a more realistic understanding of where your money is going and what areas you might be able to adjust.

First, estimate your average monthly income.

If you don’t make the same fixed income every month, a common mistake is to plan for the income you make most often. Instead, you should prepare for the lowest outlier, to ensure that you can cover your expenses even if your income is on the low end.

Now it’s time to calculate expenses.

Take into account months when expenses will vary. Prepare for anniversaries, holidays, and upcoming events that will require more significant costs. Budgeting is not something you set and forget, check in each month to adjust as needed. The following steps are a basic guide to preparing a monthly budget.

1. Calculate your net income (earnings after IRA, HSA, taxes, and any other automatically deducted amounts have been subtracted)

2. Next, subtract the fixed, non-negotiable costs such as rent or mortgage, utilities, loan payments, childcare, or tuition.

3. Be sure to account for charitable donations or obligations such as child support.

4. Now you can start to estimate your variable expenses that change from month to month and allow more flexibility.

   -Based on your variable spending over the past few months, project a reasonable allowance in each spending category such as entertainment and groceries. Consider using the median, or average, of your previous monthly expenses instead of the most frequently occurring amount to create a better prediction. The median is useful to decrease the impact of outliers and to prepare for months when expenses are higher than usual.

5. Now that you’ve created a realistic budget based on your past few months of expenses, ensure you have a zero-sum budget. Every dollar of your projected income should be accounted for to create the most optimal budget. If income minus expenses equals more or less than zero, where will you allocate surplus funds, or cut down on discretionary expenses?

If your first month of sticking to a new budget doesn’t go as planned- don’t give up! Reflect on what caused the setbacks, and prepare to improve next month. No month will go perfectly the same as another, make space for yourself to learn and grow in your financial journey.

Benchmark to Reaching Financial Goals

 Reflect on the goals you set at the beginning of the year, or set new goals now. Setting specific goals is a proven way to measure progress and stay motivated to grow financially. Without clear benchmarks, it can be difficult to know if you are making improvements.

If you’re unsure of where to start, here is an example of a properly formatted goal that you can tailor to your situation: Pay off 50% of credit card debt by the end of the year. Let’s break down the reasons why the above goals are ideal to help you create your own.

Pay off 50% of credit card debt by the end of the year.

A goal like “Save more money” is too broad. Paying off credit card debt is a specific goal.

Pay off 50% of credit card debt by the end of the year.

Your goal needs to be measurable, so you know when you’ve reached it. Include a specific metric like 50%.

Pay off 50% of credit card debt by the end of the year.

Make sure your goal is bound to a specific time frame.

Deciding if this goal is attainable and relevant depends on your financial situation. Make sure it’s realistically achievable and beneficial to focus on at this time in your financial journey. Follow this formula to make your own goals and contact us to discuss how our unique credit union benefits can help you get there. 

Best way to reduce debt quickly

Accrued debt can be the most difficult thing to manage when you’re trying to improve your finances and increase your savings. Review your monthly debt payments and consider consolidating your debt into one low monthly payment with a personal or signature loan. Use an online calculator or contact us to see if consolidating debt or refinancing a loan could save you money.

Prepare for Next Year

While you are taking the time to sit down and review your finances- pat yourself on the back for prioritizing your financial health, then schedule your next review. Setting up recurring reviews as if you’re making an appointment with yourself will help keep you accountable to review your goals, and ensure you are making progress.