April is Financial Literacy Month and at Union Savings Bank, it’s a special time of year. We celebrate the opportunity to talk about ways to budget and save money that can bring your financial goals within reach. After all, setting financial goals is the first step toward buying a home, sending kids to college, or planning a dream retirement. This Financial Literacy Month, we’ll be diving into personal stories about budgeting, saving, home buying, and talking about money with loved ones to inspire you to start conversations about your own financial goals.

I can’t believe I never learned how to budget.

Last year, I had the chance to participate in the Financial Reality Fair. This interactive expo introduces hundreds of Connecticut high school students to the concepts of earning money, budgeting and saving. With worksheets in hand, the students made their way around the gymnasium as they mapped out hypothetical careers, salaries, and expenses.

Stationed at the Lending table, my fellow volunteers and I guided these students through the process of applying for loans and scheduling payments. Many students went on to complete their worksheets while some met roadblocks and returned to our table to figure out ways to budget and save money to make their plans work. By the end of the Financial Reality Fair, the school was buzzing with chatter about purchasing sensible cars and paying off student loans.

Walking out to my car after the expo, I had a realization that nearly knocked me off my feet: I can’t believe I never learned about this in school.

Learning about budgeting the hard way.

Between summer jobs in high school and part-time work in college, my idea of a budget was staying solvent enough to pay for what I needed without running out of cash for the occasional movie or night out. In those early years, it never occurred to me to set some of my earnings aside for a rainy day or to get a head start on my mounting student loans. I was afraid to use a credit card because I had no idea if I could it back. And when my first student loan payment came due, it took hours to dissect it and decide how to start my loan repayment plan.

It didn’t take long before my student loan repayment plan simply became a fact of life. The moment a paycheck came through, off went a student loan payment. Whatever cash was left over I considered to be spending money. This mindset led to sporadic spending habits that luckily never sent me into financial ruin, but they didn’t do me any favors, either. Without knowing smart ways to budget and save money, my approach to spending was like open season, only pulling back on the reins when the money got tight.

3 budgeting lessons learned.

Looking back, there are quite a few things I would have done differently, but three lessons stand out the most.

Lesson 1: I wouldn’t have waited until over a year into my student loan repayment plan to start paying more than the minimum balance each month. I can only imagine how much faster I would have paid off my debt had I treated disposable income as an opportunity to get ahead.

Lesson 2: I would have started a savings plan sooner. Much, much sooner. This will come up again later in Financial Literacy Month, so stay tuned.

Lesson 3: I would have budgeted much more carefully. Not only could a budget have helped me navigate Lessons 1 and 2 more adeptly, but it also could have helped me recognize future financial obstacles and opportunities before they were looming over me.

Other than taking a stroll back through memory lane, what is the purpose of reflecting on these juvenile financial blunders and lessons learned? To illustrate that writing and managing a budget is a foreign concept to many young people. But we can fix that.

How to make budgeting easier.

The key to making budgeting easier for kids today is to embrace financial decisions as teaching moments. Last Financial Literacy Month, we discussed the importance of talking openly about budgeting, including an experiment to try at home. Introducing these conversations can transform what is often thought of as a taboo topic into a practical one. And it can help pave the way for a bright financial future for the kids in your life.

For those of us trying to improve our own relationship with budgeting, there are ways to make it easier. Here are two steps to get your budget started or into better shape.

• Set a goal. Your goal could be cutting your grocery bill by $20 next month or saving toward a big purchase. My personal goals are to pay a little extra toward my mortgage each month and to save for my vacation to Nashville. Whatever your goal may be, keep it in mind as motivation to stay on track.
• Track what, where and why you spend. Tracking your spending promotes accountability. The why is especially important when it comes to tracking how much money you are spending because once you identify the why, you can more easily visualize ways to save. For example, I found myself stopping for coffee almost every day on the way to work. By the end of each week, I was spending more than $30 on breakfast alone! Realizing that I was simply bored with my coffee at home, I purchased new flavors and picked up a few more breakfast options. I haven’t given up my coffee addiction completely, but I’ve cut my spending by more than $20 per week.

These steps sound obvious, and in theory, they are. But looking inward at your own spending is always a little uncomfortable, and therefore we’re reluctant to do it. Examining your spending habits forces you to face the decisions you have made, but it also allows you to break the cycle. My coffee example is just one of many. It also goes to show that you don’t have to give up what you love. You just need to find the right balance.

Write a budget that will work for you.

Now that you have brought your spending habits to light, it’s time to get down to business. To begin writing a household budget that will work for you, the first step is to decide on a timeline. Not every budget – and not every budgeting person – works on the same schedule. You may find that a weekly budget is easier for you to follow. Or if that’s too frequent, a quarterly budget may be more your speed.

I follow a monthly budget for my general expenses like mortgage and utilities then narrow it down to a weekly budget for groceries, gas (I have to fill up at least once a week) and dining out. The monthly expenses are relatively static, but I find that keeping a weekly budget helps me avoid overspending. Plus, I feel satisfied knowing that a little extra money will end up going toward that trip to Nashville.

We are excited to share personal stories of budgeting, savings and other topics this Financial Literacy Month. It’s a great time to discover ideas that can help you reach your goals, but you don’t have to wait until next April to get started. Subscribe to the FutureTrack Newsletter to get weekly finance articles delivered to your inbox. Tune in next week when we discuss talking about money with loved ones.