Free Budgeting Resources from Consolidated Credit

Learn how to make a personal budget that works to achieve your goals.

Budgeting is a fundamental skill in personal finance. As much as many people try to track spending in their head, this often leads to overspending that causes credit card debt. If you want to avoid debt problems and save money so you can achieve your goals, you need a budget.

The resources in this section are designed to help you learn how to create an effective household budget. You’ll learn the building blocks of budgeting and get tips on how to ensure your budget is flexible enough to adjust to changes. If you still have questions about budgeting, use the Ask a Question button at the bottom of this page to ask our certified financial coaches.

Budgeting Videos: Learn to build a stable financial house

Learn about the basic building blocks of a budget and how you can use them to construct a solid foundation for your household finances.
  1. How to Build a Budget that Fits Your Family

    How to Build a Budget that Fits Your Family Learn about the basic building blocks of a budget and how you can use them to construct a solid foundation for your household finances.

    A good budget provides a framework for financial stability and success. You build a stable money management structure that allows you to reach your financial goals. All of your monthly expenses should fit somewhere into that structure so you can avoid taking on high interest rate credit card debt for things that should be covered by cash.

    Here’s a quick look at how a balanced budget works.

    Building a budget starts by laying the foundation and adding up your total monthly income. Expenses should be separated between one of three levels – fixed, flexible and discretionary.

    The first level is where all your needs with a fixed cost live. That’s any need with a cost that stays the same every month. The next level is where needs with no fixed cost live. In other words, things you can’t live without but the cost can vary from month to month. The final level is where your wants live. You know, the things that aren’t necessary but make life fun.

    Credit card debt payments can live in one of two places in your budget, depending upon how much debt you have. If you have low balances and pay off what you charge at the end of every month then credit card payments live with those other flexible expenses. However, if you have large debts to pay off make big payments every month until you’ve paid it off in full.

    Discretionary expenses are where all the fun and frills live in your budget. And this is where you should start if you need to make cuts to scale back. Savings often gets treated like a discretionary expense and shoved in with the rest of your wants, which means it can get lost in the mix or cut entirely. But really, savings should move in with your fixed expenses. Decide how much you can save each month and make that a set cost in your budget that you pay to yourself every month.

    Once you’ve constructed a budget, you have to maintain it to make sure it stands up over time. Every few months compare your actual spending to what you planned to spend. This will make sure you’re keeping everything within the structure you set. This ensures that your financial house can hold all of your monthly expenses so credit cards don’t have to cover what’s been left out.

    If you see you’re overspending consistently somewhere you may need to work on your budget again to make sure it’s not too bloated to fit the foundation. In some cases this may mean you have to cut something to make room. Eliminating debt or adding income will give you the ability to add these expenses back once you have room to fit them in.

    For more advice about budgeting and managing money visit consolidatedcredit.org.

  2. Balance Your Budget to Stop Living Paycheck-to-Paycheck

    Balance Your Budget to Stop Living Paycheck-to-Paycheck There's an easy way to ensure you always maintain a balanced budget. Learn how to use your income-to-expense ratio to balance your budget so you can stop living paycheck-to-paycheck.

    Balancing your budget so you can stop living paycheck to paycheck

    A balanced budget ensures that all of your various expenses can fit the foundation of your income, so you can maintain a stable house through any challenge. But what’s the right balance for your budget structure?

    When you live paycheck to paycheck your income barely fits all of your expenses. In order to create balance, you’ll need to check your income-to-expense ratio.

    Divide your total monthly expenses by your total monthly income. Your ratio should be less than 1, indicating that you spend less than you earn. Ideally, your ratio should be point-seven-five or less. This means that you spend less than 75% of your income, which leaves 25% of your income as free cash flow in your budget.

    Some of your cash flow can be converted into savings. This helps you increase the amount you dedicate to save, so you can have a robust, solid saving strategy that supports your goals. Ideally, savings should be treated like a regular reoccurring expense in your budget. This means savings gets housed with the rest of your fixed expenses. Aim to save at least five to ten percent of your income each month.

    This is beneficial because unexpected expenses always seem to show up. When a large expense arrives unannounced, it has the potential to throw your financial house out of balance. But free cash flow and savings help you accommodate unexpected expenses easily. That way, you don’t have to invite credit card debt in for unexpected costs, because credit card debt shouldn’t be a welcome solution to address budget challenges.

    For more great budgeting advice, visit ConsolidatedCredit.org.

  3. Organizing Your Expenses So It's Easy to Cut Back

    Organizing Your Expenses So It's Easy to Cut Back Learn why dividing your expenses into the three categories we recommend – fixed, flexible and discretionary – makes it easy to cut back so you have more free cash flow to save and pay off debt.

    Organizing your budget effectively to maintain stability. A good budget categorizes expenses, keeping them organized.

    The base level of your budget houses fixed expenses. These expenses come first because they’re things you need to survive. This includes rent or mortgage payments, HOA fees, insurance, student loans and car payments. The cost for each fixed expense generally stays the same. However, changes may occur annually. But beyond these annual changes, fixed expenses are usually easy to plan around.

    The next level of your budget houses all of your flexible expenses. Flexible expenses are also things you may need to survive, but they have no set cost. As a result, they can get too big to fit into your budget unless you monitor them closely to avoid overspending. This can make flexible expenses trickier to manage because they fluctuate. And some months certain flexible expenses may not show up at all. While it can be harder to control these expenses, they’re also easier to trim down if you need to cut back.

    Finally, the top level of your budget is where all the nice-to-haves live. This is your discretionary expenses. This level includes everything from entertainment and subscriptions to tithes and trips to the gym or salon. As tough as it can be to kick these out, you can live without them, if necessary.

    As you take stock of discretionary expenses take note of every incidental that may be hiding out. This includes things like your “cappuccino” factor – that’s the $3.50 you spend on specialty coffee each morning. That expense may not seem like much, but it adds up to nearly $1,300 a year! So take note of these small incidentals to make sure they fit in your budget and if they don’t, they have to go.

    For more advice on budgeting, visit ConsolidatedCredit.org.

  4. The Secret to Managing Debt within Your Budget

    The Secret to Managing Debt within Your Budget Credit card debt can be tough to manage because it can act like a fixed or flexible expense, depending on how you manage debt. Learn the right way to use your budget when you need to pay off credit card debt.

    Using your budget to strategically manage debt.

    A solid budget structure makes it easy to control debt. Most debts are housed with your other fixed expenses – like your mortgage or auto loan are installment debts with fixed payments.

    But credit card debt can be a little tricky to house. Credit cards are revolving debt. This means your bill grows as your balances go up. But if you have zero balance, then that bill disappears completely.

    If you pay off your debts in-full each month, then credit card debt gets counted as a flexible expense. But if you carry balances over each month, then you may be better off making credit card debt payments as a fixed expense. This means you have to consider your budget as a whole to see how much you can afford to pay.

    First, see how much you can afford to pay each month. You evaluate your free cash flow, to maximize the amount of money you have for debt repayment. Then you set this amount as a fixed expense in your budget. The funds are used to pay off one credit card debt at a time, starting with the card that has the highest APR.

    So, if you have five credit cards to pay off, you make minimum payments on all four. Then use the rest of your funds to make the biggest payment possible on the debt with the highest APR. Once that debt is gone, you move on to the next. And you continue to pay each debt down one at a time.

    If you don’t have much free cash to start with, knock out your debts starting with the lowest balance. Each debt you knock out frees up more cash to focus on the next. In normal circumstances, credit card debt payments should take up to no more than ten percent of your income.

    And remember, if you’re having trouble making debt payments fit in your budget, Consolidated Credit is here to help.

  5. Analyzing and Adjusting Your Budget

    Analyzing and Adjusting Your Budget Your budget is never static! Learn how to regularly analyze your budget to make sure you stay on track and how to adjust your budget for changes major life changes and seasonal expenses.

    Analyzing and adjusting your budget to foster financial stability.

    A budget is a basic blueprint of your finances. It helps you organize and categorize expenses for a stable financial house. But you can’t just draw it up and toss it aside. You have to check in often and make adjustments as needed.

    Fixed expenses only adjust if there’s a change, for example annual property tax adjustments on your mortgage. This consistency makes it easy to house fixed expenses.

    On the other hand, flexible and discretionary expenses have no set cost. So you have to take steps to ensure they fit in your budget structure. To do this, you set target spending limits for each expense. Look back at what you spent in the last three months. Then take an average of those three months to determine a target spending limit.

    Once your budget is set, compare your actual spending to the targets you set. If actual spending is consistently higher, you must cut back or adjust the target limit. Just make sure total expenses always fit the structure based on your income. If one expense grows, something else may need to be reduced or cut.

    Come back to review your budget at least once per quarter or every three months. And also remember to make seasonal adjustments. Utility bills and fuel costs typically change from summer to winter. And you can also use your budget to plan ahead for key events like back to school and holiday shopping. By revisiting your budget often, you can always have a financial house that adjusts as needed to fit your life and goals.

    For more great tips on budgeting, visit ConsolidatedCredit.org

Free Budgeting Worksheets

Consolidated Credit has created three handy budgeting worksheets that can help you organize your income, expenses and credit card debt. These worksheets follow the same structure you just learned about in the videos, so you can build a budget that works.

Budgeting Infographic

Maintaining a good budget is a delicate balancing act. This infographic helps you understand how to balance the various expenses in your budget and how to avoid a financial fall when unexpected events arise. Learn how to keep your balance, even in an unsteady economy.

Self-Help Guide: Budgeting Made Easy

Download our Budgeting Made Easy PDF so you can either print it or save it to your favorite mobile device. This guide summarizes everything you’ve learned from the other resources, so you can have an easy reference guide.  Refer to it anytime you have a question about how to make, use or adjust your personal budget.