Budgeting is personal. There are many things that will apply to most households, but your budget should uniquely reflect your responsibilities and goals. A budget should be pleasing to the eye and easy for you to use – you might like: color coding, category selections, totaling weekly/monthly income, expenses and balances, etc.
The framework of your budget includes expenses and income but should NOT include overtime income – if overtime is reduced or eliminated, it can be financially disastrous – save overtime for the unexpected. Use overtime as a savings plan – future education, vacation, down-payments, etc.
If your paycheck includes tips and/or overtime or if you work seasonally, you may want to create a budget based on what you would consider different types of variable paychecks (excellent, good, average, insufficient) from your workplace. For paychecks considered to be excellent or good, save part of that income for future paychecks that may be insufficient for your monthly expenses. Also, the IRS just created some new reporting rules related to tips and overtime for 2025 – see https://www.irs.gov.
Some of the Items I Recommend in Budgeting:
- Emergency Savings: If you add up your monthly expenses, you should have, at a minimum, three times your monthly expenses in your emergency savings – for example, if your monthly expenses equal $1,780 ($1,780 x 3 months = $5,340) $5,340 is the minimum you should have in emergency savings.
- Additional Savings Plans: (1) vehicles – repairs/maintenance/continual, (2) budgeting for home repairs – this is also true when you are applying for a mortgage – can you afford future home repairs AND your mortgage payment, (3) mortgage payments that increase due to taxes/insurance, (4) rent increases, etc.
Feel free to call Lori Menn, Personal Financial Counselor at Summit County Veterans Service Commission (330-564-8050) for an appointment to create your personal budget, plan your financial goals including credit, debt management, savings, and more!
