How to Create a Budget in 4 Simple Steps


Budgeting is easy if you have a plan. But we don't always plan for emergencies.


Now is a really good time to take a hard look at where your money is going in order to make some decisions about what is the most important to your survival with the least amount of harm to your overall financial picture. You can use effective money management and emergency loans to get through unexpected hardship.


Follow these 4 simple steps to learn how to create a budget in an emergency.


Step 1 - Budgeting Starts with Making a List


Write down all of your bills and expenses. Some are obvious, such as rent or utilities and food, but we recommend making a list to help jog your memory for other expenses such as water delivery or pet food.


Look at your bank and credit card statements for automatic payments like Pandora or gym memberships. Also remember to include periodic and occasional expenses like your DMV renewal or property taxes.


Here are some categories to include in your list:

  • Rent and utilities
  • Food
  • Miscellaneous costs (water delivery, pet food, etc.)
  • Automatic payments
  • Periodic payments


Step 2 - Organize and Prioritize Your List


Go through your list and decide what is necessary versus discretionary.
Prioritize your list in order of most important to the least. The basic needs must be met first- keep a roof over your head and food on your table. We also suggest that electricity and running water is fairly vital for survival!


Step 3 - Emergency Loans and Other Resources


Look at the options available to help you with your necessary expenses.
You are looking for ways to reduce the outflow of your limited resources.


You may want to look into an emergency loan to help you with your basic needs. Perhaps you need help supporting your business through hard times. You can also contact your mortgage provider to see if they have any assistance available for you, such as deferred or skipped payments.


Look for food resources to minimize that necessary cost. Try using what is in your pantry and freezer to lower your grocery bill. For your utilities, there are already services in place to help customers with reduced income. Give them a call or go online to their websites to see how they can help. You or your business may also be eligible for disaster financial assistance.


Step 4 - Contact Your Creditors


Look at options available to help you with your discretionary expenses.
If you have steady income and can afford more than necessities, go down your list of priorities and pay what you can.


Remember that missing your minimum payment per the contracted agreement on your debts will negatively impact your credit score significantly. Even one missed payment will make a big impact. Contact your creditors as soon as possible, before you are 30 days past due, and see what they can do to help you through this temporary crisis.


Remember that this is temporary. These adjustments and reductions will not be forever and things will go back to normal again. Stay calm, stay focused, stay aware of your resources, and most importantly, stay safe.


DISCLAIMER: The tips provided are for informational purposes only and in no way should be relied upon for financial, tax, or legal advice. The information is subject to change without notice. California Coast Credit Union encourages you to do your own due diligence when making decisions regarding your financial management.


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