When your budget works, it gives you the money you need for the things you need and offers the chance to save for what you desire. A properly managed budget shouldn't feel punitive, but instead give you guardrails against overspending in one area. Rather than facing a serious financial shortfall, a good budget will give you guidelines for what you can spend each month on housing, transportation, insurance, groceries and entertainment, as well as leaving some space for gifts and savings. If you find that your budget is too tight in one area, you will have to pull from another area to feel balanced. Start with a fairly loosely structured budget, then snug things up as you see a pattern of behavior and spending emerge. Finally, remember that a budget is a tool that can bring your goals closer. Use, don't resent it. If you’ve struggled with setting up a budget, try these tips.
Carry a notebook with you and when you remember that you need something, write it down. If possible, find a small notebook with pockets in which you can stash budget-friendly tools, such as
Keep this list with you and make sure you have it when you shop to avoid short trips for just a few things. These short trips are what make over-spending easy.
As you start out on your budget-building process, take cash with you when you shop for household consumables. Rather than relying on a credit card, focus on spending only the cash in your wallet. Instead of stocking up, for now only spend your cash on what you need. Going back to cash will make money real again in your mind and make it easier to stick to your list. Sometimes it’s just too easy to spend when it’s just tapping a card and signing your name.
There are many gadgets, apps, and tools out there to help you stay on budget. For best results at the beginning, try to stick to the notebook and cash spending. Here's why: Too many people get tangled up in finding the perfect tool and continue to spend in ways that are contrary to their goals. Don't be someone who never starts a budget because they can't find the right app.
The simplest budgetary percentage breakout you can put to work for you is the 50/50 budget. With this budget, half of what you make goes toward what you need, including
The other half of your spending can be put to
It's loosely structured enough to give you some allowances; for example, if you're saving for a car but need to buy one before you have the money saved, you can turn that monthly savings deposit into a car payment. However, this does mean that you may have to spend more than 50% a month on the necessaries until the car is paid off.
If you feel that the monetary part of your life is completely out of control, plan a freekend or a no spend weekend. From Friday morning to Monday morning, you spend no money. This isn't about starving or spending the weekend moping. Instead, hit the grocery store on Thursday night and stock up on what you'll need. Plan a visit to the library or a local museum that offers free entrance on one weekend day. Invite friends over for a potluck and watch a movie together. Find ways to be social without actively spending money.
