The budget has gotten a bad name, which is too bad. But at the end of the day, a budget is just a plan for how you will spend your money.
No matter what you’ve heard or thought about spending in the past, hear this: a budget doesn’t limit your freedom, it gives it to you! It means that you take charge, make a plan, and tell your money what to do. Every single dollar you make!
Also, these 15 budgeting tips will help you, whether you’re just getting started with planning or you want to get better at it.
15 Budgeting Tips
1. Finish your budget before the month starts.
This means you make a plan and name every dollar before the month even starts. We call this a “zero-based budget.” That doesn’t mean, though, that you have no money in your bank account. (Leave a few hundred dollars as a safety net.) It just means your payment minus all your costs equals zero.
This is how you can make sure that none of your money gets lost or spent by mistake. This is how you get full control of every dollar you make.
2. Work on the budget as a team.
You need someone to help you keep track of your money. If you’re single, find someone who will support you and help you reach your goals. Have a budget meeting every month to talk about what happened and what’s coming up.
If you’re married, have a family planning night once a month. Make it fun! Put on good music and grab some of your favorite snacks.
You need to be on the same page about money, so make plans for the future and set goals together. Don’t forget that if you and your partner are one, your bank accounts should also be one. No longer is it your money or mine, but our money.
3. Keep in mind that each month is unique.
Some months, you’ll need to set aside money for things like school materials or regular car repairs. You’ll save money in other months for things like trips, parties, and holidays.
Make sure you plan for all of your costs, even the ones that change from month to month. Pull up your calendar while you’re making your budget so that those special events don’t sneak up on you.
4. Start with the areas that are most important.
Giving and saving come first, then the Four Walls: food, energy, a place to live, and a way to get around. Once you’ve taken care of your most important needs, you can fill in the rest of your spending.
5. Pay off what you owe.
If you have debt, it should be the most important thing in your spending.
When you stop paying for the past, you can start planning for the present and the future.
6. Don’t be afraid of cutting costs.
Prepare to jump! You might need to make some cuts to your spending. If money is tight right now because of inflation or for some other reason, cutting your budget is a quick way to save money. Reduce the number of streaming services you use from three to one, eat out less, and shop at cheap food and clothes stores.
Remember that you don’t have to make cuts forever. You can always change things in the future.
7. Set auto drafts.
Bills aren’t the most fun part of being an adult. But it’s also inevitable. Set up automatic drafts for a few of your bills to save you time and stress.
Just keep an eye on how your money is coming in and going out. If you set up too many automatic withdrawals and buy too many groceries in bulk at the same time, you could end up going overdrawn. Know when money is going into and coming out of your account.
8. Have goals.
Whether you’re paying off school loans, saving up for an emergency, or paying off your home, you need to remember why you’re doing what you’re doing. Why are you putting yourself through this?
Use your “why” to help you make goals that will bring you closer to the life you want. Then, put your goals on paper. Make them stand out. And give them a time frame so they can see that you’re moving forward.
Keeping your goals in mind and remembering why you want to budget will help you stay inspired even when you don’t feel like it.
9. Write down how you’re doing.
When it comes to setting goals, don’t make them and then forget about them. Keep track of how far you’ve come.
Meeting with your budget person once a month is a great time to talk about your goals. Celebrate how far you’ve come and take some time to think about what you still need to do.
And tell yourself the truth. Does your present budget help you get where you want to go? If the way you spend doesn’t help you reach your goals, think about ways to cut costs or make more money so you can reach your goals faster.
10. Keep a line in your budget for “other.”
Here’s a tip for making a budget that you can start right now: Set away a small amount of money in case you have to pay for something unexpected during the month. Put this on your budget as a line for “other.” So, if something comes up, you won’t have to take money from somewhere else to pay for it.
Listen, if certain costs keep showing up in this area, it’s probably time to give them their own budget line.
11. Cut your credit cards into pieces.
You need to not only pay off your debt but also get rid of your credit cards for good. Don’t use them! You can cut them up, break them, or even use them to make something. No matter what you do, get rid of the thought of taking on more debt.
People say they pay off their amount at the end of the month, but even if that’s you, making one big payment every month is a terrible way to handle your money. Since you don’t know where your money is really going, you can’t really control it.
And if you are paying interest, which is very high right now, your income is actually stuck in the past. That’s not a good way to move up.
So, use your debit card or even cash and get rid of your credit cards like they were your ninth-grade crush.
12. Use cash for some parts of your spending that give you trouble.
If you always go over your budget for groceries or spending money for fun, cash out those areas and use the envelope method to keep you on track. Just go to the bank and get the amount of cash you’ve set aside for that area in your budget. If you run out of money, stop spending! It’s the best way to hold yourself accountable.
13. Try using a budgeting tool online.
If you don’t like writing things down or using spreadsheets, you should join the 21st century. You can use your smartphone to plan a budget and keep track of how much you spend. You can also make a joint budget with your partner, which is a great way to keep the lines of conversation open.
14. Be happy and quit the comparisons.
You have a lot more than you think you do. Don’t put yourself in the same category as anyone else. Comparison will not only take away your happiness, but it will also take away your money. Keep going forward and doing what’s best for your paycheck, your goals, and your life.
15. Be very kind to yourself.
One of the most important things to know about making a budget is Most of the time, it takes three to four months to figure it out. Your budget won’t be just right the first or second time you make it. But you’ll make it! So be kind to yourself as you go. Learn from your mistakes, and don’t give up!