Is Budgeting too Much of a Hassle? Find Your Spending Number

Budgeting can be difficult for many reasons. First, it requires math — a subject disliked by many. It also requires time — something that many people don’t feel like they have enough of. Finally, it takes discipline to examine a budget each month and track where you’re spending your money. If you have trouble with any of these requirements, it may be time to calculate your spending number.

Using a spending number — the overall number you can spend each month — to drive your budgeting process isn’t completely different from traditional budgeting. It simply examines the total amount you spend each month instead of focusing on the categories in which you’re spending your money. By using your spending number — you can simplify your budget and spend less time stressing about whether you’re blowing your entertainment budget.

A budget is one of the most effective tools you can use to track your spending, but traditional budgeting is not going to work for everyone. It’s important to find a method that works best for you. If traditional budgeting hasn’t worked in the past, a more simplified approach like setting a spending number could be worth a try.

Determine Your Spending Number in 3 Steps

Calculating your spending number is simple and not a far stretch from how you created a budget. The difference is that instead of focusing on everything you’re spending your money on, you’re looking for one number to guide you through your monthly expenses. To calculate that number, follow these three steps.

1. Calculate your monthly income after taxes.
2. Add up your regular monthly expenses. This should include all debts, subscriptions, rent or mortgage, and other bills, as well as a set amount to contribute to your savings.
3. Subtract your monthly expenses from your monthly income to get your spending number.

Your spending number is what you have left over to spend on food, entertainment and other expenses. While this method does not eliminate the need to track all of your expenses, there are tools you can use to make sure you don’t go over your number, including:

• Mobile budgeting apps — Download an app you can access on your phone to keep track of your expenses.
• Credit cards — Use a designated credit card for the rest of your monthly spending. By checking your credit card account regularly, you can make sure you don’t go over your spending number, then pay the balance in full each month.

Schedule an appointment today with one of our Personal Bankers to learn more ways you can keep track of your finances.