Learn to Stay on Budget
Do you find it hard to stay on budget? Many find budgeting too confining and often slip up and spend too much. If you overspend and find it hard to stick to your budget, you are going to love this guest post by Kate Underwood from Club Thrifty. Check it out here:
We all know we should be using a budget, right? After all, the benefits of effective budgeting are obvious. A budget can help you get out of debt, ensure you have money for all your needs, and motivate you to save for future goals. Heck, it might even give you the freedom to spend more lavishly on things you care about!
Unfortunately, too many of us struggle with budgeting and end up thinking it’s hopeless. We give up when we hit a few bumps in the road.
One thing to remember is that a budget is a powerful tool, but getting it right can take some time. Commit to it for the long haul, knowing you can fix things that don’t work for you.
If you’re struggling with getting your budget off the ground, we’ve got a few simple tricks you can try right now to help keep your budgeting journey on track.
1. Write Out Your Budget
We tend to be more consistent with goals when we write them down. Why not go old-school with it? Use a pencil and paper to brainstorm every item you’ll spend money on for the coming month.
Writing down a budget reminds you of all of your fixed expenses (think rent/mortgage, internet, car payment, etc.). It reveals how much is left over for other expenses.
Be sure to give your money an assignment – write down the non-negotiable stuff you need to pay for each month. Then divvy up what’s left among your non-essentials, such as entertainment, eating out, etc. You might want to overestimate on the variable expenses, just to leave a bit of wiggle room.
The act of writing each expense down (or with a digital app, if you prefer it) helps cement the budget in your mind and will set you up for success long-term.
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2. Create a Budget Spreadsheet
Spreadsheets are fabulous tools for anyone looking to organize their finances. If you’re serious about reaching your money goals, go ahead and make a budget spreadsheet. Excel is an excellent tool for this.
Excel offers several effective budget templates. If you’re not big on pen-and-paper budgeting, you can use spreadsheets to list your monthly earnings and expenses. Then, check on them each month to track how well you followed the plan.
Pre-made budget templates are awesome for brand new budgeters who don’t know where to begin. You can choose from a family budget, personal budget, vacation budget, and more. Simply input your own data to track monthly income and expenses.
If you try the basic templates but find yourself wishing for a bit more customization, don’t worry! You can edit the pre-made options to fit your needs, or even create your own personalized spreadsheet.
Spreadsheets can work for everyone – from a money newbie to a total money nerd. In case you don’t have access to Microsoft Excel, Google Sheets is a terrific option for spreadsheets, as well.
3. Use Budgeting Software
You might be familiar with Quicken, the granddaddy of personal finance software programs. Although Quicken is still a popular software choice, today, there are more than a dozen Quicken alternatives to help you manage your money. Some focus exclusively on budgets, while others paint a more comprehensive picture of consumers’ finances.
Want to be notified when you’ve gone over budget in a certain category for the month? Perhaps you’d like to track your monthly budget and monitor your net worth? Or maybe you want to keep tabs on your credit score? Many of these budgeting tools can often be customized for your precise needs. Even better, many of them are free!
4. Track Your Spending
Tracking your spending is an integral part of budgeting, no matter which method you choose. Writing down your budget is great, but if you stop there and don’t pay attention to your spending, you’ve only done half the job.
Do not skip this step. You need to keep track of what you’re spending to make your budget work. Whether you use a handwritten budget, a spreadsheet, or software, be sure to track every dollar you spend.
Mark down categories for each expenditure and keep tabs on them throughout the month. If you notice overspending in one area, compensate by adjusting the total allotment in another area.
Tracking your spending is eye-opening. If you find any surprises in your spending, don’t beat yourself up. Remember that you can make changes! It’s better to know if you’re overspending in one area so you can get motivated to make adjustments.
Check out these cash envelope labels to help you stay on budget
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5. Build a Zero-Sum Budget
Plenty of people swear by the zero-sum budget strategy, and for good reason. Zero-sum budgeting gives a specific task to every dollar you earn. Of course, you must pay your bills each month – that’s a given. However, you should also make a plan for each dollar that doesn’t go toward necessities.
With a zero-sum budget, every dollar you bring in each month is assigned a purpose – whether it’s for regular bills, variable expenses, debt repayment, savings, or investments. If you have money remaining after budgeting for the necessities, don’t let that cash slip through your fingers.
Assign that extra money toward paying off debt, retirement investments, or a vacation fund – whatever is best for your financial situation. In a zero-sum budget, you shouldn’t have any money “left over.” Instead, you’ll budget any excess to be used to reach saving, investing or other financial goals.
6. Be Clear Why You Want to Budget
No clever tech tricks with this one! To successfully make and follow a budget, and be consistent with it month to month, you need to find clarity on your purpose.
Take some time to think about your financial goals. Write down your short-term, intermediate, and long-term goals. Then, think about how a budget can help you reach them. After all, that is the whole reason you started a budget in the first place.
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Like anything worthwhile, budgeting may take some time to learn. A budget may not be the easiest skill to master, but it doesn’t have to be intimidating. Remember that budgeting is a fluid process and you can improve it over time.
Changes in your expenses will happen. Changes in your income may happen, too. Rather than worry if you get a little off budget one month, simply adjust and get back on track the next month.
The benefits of budgeting far outweigh any hassles of figuring it all out. Imagine the freedom and peace of mind you’ll gain just by knowing you’re the one in charge of your money. There’s no better feeling! Using some of the tools and tricks outlined above, you can become a budgeting rockstar.
Do you have a favorite budgeting method? Share it with us in the comments below!
Kate Underwood is a freelance writer and staff writer for Club Thrifty, a website dedicated to helping people dream big, spend less, and travel more.
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