The idea of creating a budget can be so daunting for some that they simply don’t. We understand budgeting isn’t fun to think about, but it is important for your overall financial success. Here’s our favorite tips to make budgeting easier.
Budget for the most important things in your life
To set a budget you can stick to write down everything in your life that’s important to you. Next, write down all of the things you currently spend money on, your daily expenses. When you set the two lists side-by-side, look for the things that aren’t as meaningful to you, and cut those or trim back on them right away. For example, you’re buying lunch every day simply out of habit and choose to pack your own instead. Take that lunch money and put it toward one of your priorities, like paying off debt. Use our budgeting worksheet to get started.
Set realistic goals
Make a list of your short and long-term financial goals. Short-term goals should take around one to three years to achieve and might include things like setting up an emergency fund or paying down credit card debt. Long-term goals, such as saving for retirement or your child’s education, may take decades to reach. Remember, your goals don’t have to be set in stone, but identifying them can help motivate you to stick to your budget. For example, it may be easier to cut spending if you know you’re saving for a vacation.
Shop only a few times per month
A way to simplify your budget that should also save you time: set designated shopping dates. Pick one day a week for groceries, and for other types of shopping, set aside another day to get the job done. The rest of the time, try not to spend a cent. By not hitting the store every time you drive by, you’ll save money by default. Also, by setting aside a special day for shopping it might make you more intentional with what you buy, leading to more savings.
Give yourself an allowance
An allowance isn’t just a way to reward kids for taking out the trash, it can help keep your spending on track. Set aside a certain amount of money you can spend on whatever you want, then stick with that amount month after month. This money can be used for a fun splurge or as regular spending money, whatever you want. Outside of your allowance, try to spend only on regular and recurring bills. This way you’re not depriving yourself completely, you’re just cutting your extra spending to reach your goals.
Let budgeting apps or tools do the work for you
When it comes to simplifying your budget, make technology your friend. Try online personal budgeting tools like Mint.com, for example, where you can create a budget and track all your spending. With You Need a Budget, you’ll learn to live on last month’s income and cut the waste from your budget.
Review your budget regularly
Once your budget is set, it’s important to review it and your spending on a regular basis to be sure you are staying on track. Few elements of your budget are set in stone: You may get a raise, your expenses could change, or you may reach a goal and want to plan for a new one. Whatever the reason, get into the habit of regularly checking in with your budget following the steps above.
No one likes the idea of budgeting at first, but those who succeed love the results. With the right approach, simplifying your budgeting process can be much more of a help than a hindrance.
Sources and enhanced by Credit Union of Denver