Everyone says they want to save more money and be better at managing their finances. But if you don't know where to start or have questions along the way, it can be hard to make progress, and you can easily become discouraged and fall into old habits again.

Don't worry. We understand the struggle that so many people face when it comes to managing their money effectively. The good news is that First Alliance is here to help.

I sat down with two of our financial experts to get answers to some of the most common questions we are asked when it comes to budgeting and saving.

Expert Advice on Budgeting and Saving

Meet Michelle and Hayley –two of our budgeting and saving experts at First Alliance Credit Union.

Michelle has been helping people gain financial control for over 20 years. The one piece of advice she always gives is that daily habits add up: “Once they see that making small changes, such as bringing lunch instead of eating out, saves money, they continue to find small ways to save and that really can add up.”	Hayley has been a financial expert at First Alliance Credit Union for the last 5 years. Her favorite part of helping people learn healthy financial habits is seeing the relief on our member’s faces when they no longer have to stress about their finances.

Question 1: What is the purpose of budgeting?

Michelle answered “It’s about knowing where your money is going. It gives you a picture of today, which is especially important if you want to start saving for a larger purchase. It’s hard to truly understand where your money goes without using a budget to organize it first.”

Hayley agreed, adding “Budgeting is about knowing where you are spending your money and being able to make adjustments to certain areas that will benefit you.”

Question 2: How should someone get started with saving money into an account?

Michelle advised “Start small, take $10 to $25 per paycheck and put it in savings. You will not even notice it is gone, especially if set up through auto transfer. Overtime slowly increase the amount you’re saving until you reach about 10% of your income.”

Hayley added, “I agree with automating your savings by using an automatic transfer or direct deposit. I also advise members to use a separate savings account for different savings goals. This helps you see your progress which can be very motivating.”

Question 3: Should you include putting money into savings in your monthly budget? Why?

Hayley said, “This is especially important when you’re just getting started with saving and budgeting. It’s important to have your savings as a line in your budget, that way you know exactly how much you have to save.”

Michelle agreed, adding: “Yes, part of knowing where your money goes is to track all of it! Especially, the money you plan to put into your savings. Including the money you want to save in your budget helps ensure you actually save it, not accidentally spend it.”

Question 4: Does budgeting help you save money?

Hayley responded: “Yes, making a budget makes you aware of where your money is going and therefore shows you the areas of you spending you can cut down, and ultimately save money.”

Michelle added: “For sure, once you know where money goes by making a budget, you might think twice about frivolous spending, when you’re not spending thoughtlessly you will save more money.”

Interview Summary:

Michelle and Hayley are full of good advice and tips when it comes to gaining control over your finances. Budgeting and saving definitely go hand in hand. If you’re just starting to save money, make a budget first. This will help you better understand where your money is going, which will help you develop a plan for beginning to save money into a savings account.

If you still have questions about budgeting and saving…

First Alliance Credit Union hosted a Facebook Live Question and Answer session about budgeting and saving on our Facebook Page on Thursday, February 28th, 2019. We asked Michelle and Hayley questions from viewers about budgeting or saving. You can check out the recap and the video right here!