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Control Your Money, Don’t
Let it Control You
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Brock (He/Him)
Financial Education Intern
Posted March 17, 2022
What is a budget?
A budget tracks your income and expenses over the course of a month with the purpose of increasing savings, decreasing needless spending, and paying off outstanding debts. Utilizing a budget provides you with more control over your finances, better prepares you for an emergency and enables you to meet and track your financial goals. The most important step in preparing a budget is identifying your goals. Ask yourself the question; what am I trying to accomplish, in terms of finances, in the short-term, medium-term, and long-term. Keep in mind you want your goals to be Specific, Measurable, Attainable, Realistic, and Timely (SMART).
Financial goal examples
Short-term goal [6mo-1yr]: Increase my savings by $X by the end of the semester

Medium-term goal [1-3yrs]: Increase my emergency funds by $X before I graduate

Long-term goal [3yrs +]: Pay off student loans X years after graduating
Budgeting to avoiding debt
When you have access to a credit card it can be extremely tempting to spend beyond your means. The average American holds $6,270 in credit card debt; however, the median debt is significantly lower at $2,700. A study by CNBC found that discretionary purchases, non-necessary goods a household can live without, is the main reason for credit card debt (32%).

Unfortunately, if you have poor credit or no line of past credit, credit card companies can lend you money at a higher Annual Percentage Rate (APR). This means if you were to carry a credit card balance, a lender can charge you upwards of 23% on your outstanding balance, in turn increasing your overall debt. Carrying a credit card balance puts you in a dangerous loop and can be very difficult to pull out of. Luckily, creating and utilizing a budget can significantly reduce the likelihood of entering into this cycle and help break you out if you are currently holding debt.  
Looking for a budgeting tool?
Using MSUFCU’s ‘Monthly Expense Report’, you can easily breakdown various income sources, savings, and 10 subcategories, to breakdown various expenses. Request a copy of the Excel spreadsheet using our ‘Ask an Expert’ tab.
Sources:
https://www.valuepenguin.com/average-credit-card-debt
https://www.cnbc.com/2019/05/23/nearly-25-percent-of-americans-are-going-into-debt-trying-to-pay-for-necessities.html#:~:text=Most%20debt%20is%20derived%20from%20spending%20on%20extras&text=In%20CNBC%20Make%20It's%20survey,comes%20from%20paying%20for%20travel
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