Being able to afford just about anything while on a budget seems like a dream, in the impossible sort of way. Budgets are often avoided because no one likes to feel like they are limited or confined. They want their money to feel free like it belongs to a nudist colony.
Which is great… and that’s fine… but eventually you start to lose track of where your money is going. It starts to run a little too wild and too free that you’ll have nothing to really show for it. Some months you survive just fine and other months you upgrade your cell phone and iPad and wonder how on earth this will all sort out at the end of the month.
With any budget comes great responsibility and certain determination to not spend more than you make, but it doesn’t have to be a deterrent from the things you really want to have this world. If anything, the budget will help you stay on track with your day-to-day expenses and be able to better plan for the larger expenses.
What is the easiest way to budget?
Be realistic. I mean really, you only make so much every month. As much as we’d like to all buy what we want, when we want, we can only work with what we have available.
Consider automating your savings. Don’t make saving money a chore. With only banking, it’s so easy to setup reoccurring transfers every month that goes from your checking to your savings.
Use online tools. Whether your bank offers and handy feature, or you utilize an app or another online service, use these things to your advantage.
Try budgeting for additional expenses. Planning for the unexpected is usually a great idea. You don’t have to plan for every little thing, but a little extra for the unknown can make a huge difference.
Make adjustments. Remember that life changes and we need to roll with the punches. Make adjustments to your budget as such things come up so you’ve accounted for them and there will be no surprises.
How should a beginner budget?
Getting started is half the battle, that for sure! You can do all the research in the world on how to budget, but it won’t do you a bit of good until you actually put any of it into practice. Here is a short list of things you can do to set yourself up for success with your new budget:
- Write down what you hope a budget will help you achieve. This will be you’re ongoing motivation when the going gets tough.
- Do a deep dive into current spending habits. Know where you’re spending your money.
- Use your Bank’s transaction history to catch irregular expenses. Particularly helpful for the annual bills .
- Add up all of your income. And create spending and savings limits that do not exceed the amount of money you earn each month.
- Decide how much to save. This should be roughly 15-20% if you’re debt free. If you have debt, all this should go towards your debt until it’s gone.
- Schedule a family meeting. This will be vital to ensure that everyone is included and on the same page with the end goal.
How do you stay on a tight budget?
Staying on budget can be easier than you think, especially when you put into place little things to help you be successful:
- Save for your Annual bills first. Setup an automatic bank transfer every month after one of your paychecks.
- Know your income. In other words, live within your means and don’t overspend.
- Give yourself an allowance. We all need some spending money, but you’ll have to be extremely aware of spending habits in this category.
- Review transactions weekly. Review and categorize your spending transactions weekly (at a minimum) so you are always up to date with your budget and know how much you have left to spend.
- Plan dinner meals and shop ahead. While making dinner at home is always cheaper, still not planning ahead will leave you spending more at the grocery store than you budgeted for.
- Give yourself permission for the occasional reward. After reaching certain milestones in your goals, reward yourself with something small. Like going out for some fancy dessert. Or getting that new shirt you saw in the store. Something small to celebrate the small victories.