Here is a question for you: What is something that we all know is important, but that few of us make the time to do regularly? While I am sure that you can name a few things, the answer that I have in mind is budgeting.

Budgeting is simply assigning jobs to each dollar you earn. If you do not give each dollar a job to do, you could find yourself spending it on something that does not align with your long-term goals. With this in mind, here are a few tips on putting together a budget:

• Keep the Jobs Simple – Divide your dollars up between a small number of categories to make your budget easier to maintain. For example, your categories could look like this:
  • Give – This category is for the money you plan to give away.
  • Taxes – This category is for money that you need to set aside to cover tax obligations, and it is especially important for those that pay estimated payments to the IRS.
  • Save – This category is for the money you want to be saving for current and future needs and goals.
  • Live – This category represents the money you will spend while living your everyday life.
  • Debt – This category represents the money you need to set aside to pay your obligations every month.
• Automate Your Saving – This step is very important. Any money you want to save should be done by setting up automatic transfers to the account you have designated for your savings. Automating this process will help ensure that it actually gets done!
• Monitor Your Proportions – Review the proportion of your income that is flowing to each of your categories to ensure that you are keeping an appropriate balance, given your long-term goals. This proportion will look slightly different for each household, and your advisor can provide some valuable insight into this, given the particulars of your own personal situation and goals.

When you consider the jobs you give to your dollars, which category is the most important to you, and why?