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SALT LAKE CITY -- The average American is in debt, owing more than $15,000 on credit cards. They also have minimal savings. But there's a way to beat the average, and experts say it starts with a budget.
Melody Hillam is like a lot of mothers out there: busy, with five kids plus the high energy that comes with them. Also like a lot of parents, she and her husband have money worries.
"We've fallen in and out of overdraft," Hillam says.
She was selected as Imagine A Happier You's budget makeover winner and was paired with Zion's Bank Senior Vice President Christie Richards. Together, they've been tackling the Hillam's finances.
"I believe the first step in budgeting is to understand where your money is going," Richards says.
Richards suggests families first track daily expenses, and then set monthly expenses -- things like mortgages and car payments.
Experts also recommend you spend certain percentages on areas of your life. That way you can compare and see where you're doing well and where you can improve.
"We're letting a lot of money slip through our fingers and not directing it at our overall goals," Richards says.
She suggested two tracking methods that have worked well for Hillam:
- First, Hillam now writes everything down in a spending diary; it doesn't matter if it's 75 cents for a soda.
- She also is on a cash diet. She no longer uses a debit card, but instead sets aside money for the week. Once it's gone, she knows she can't spend anymore.
"I've always been conscious of our money, but I think it's only going to help to be more conscious," Hillam says.
Richards says it's important to set realistic goals. She suggests making a list of 10 expenses you can eliminate and work on two or three until you no longer feel they're a burden.