I know many people struggle with staying on track with their expenses monthly and finding a good foundation to go off of.
This article is all about some basic foundations in budgeting and helpful ways to stay on track monthly and meet your financial goals.
Everyone needs some type of budget to follow or go off monthly.
Budgeting gives you a sense of how much money you’ve applied to certain things in relation to the income you are making.
When you can control where your money is going before you give it the opportunity to control you, you will be better off in the long run.
What’s so great about budgeting is that there are numerous ways to do it and you also must chose what is right for you and your lifestyle
The first thing is choosing in what way are you going to keep track and record your monthly budget?
Is it via a notebook, putting money in envelopes (Dave Ramsey style), an excel sheet, a handy dandy app or something else?
Really look through different options you have and find what suits you best.
The next step is choosing what type of strategy you are going to use to keep you on track.
Here are a few more common ones:
The Traditional Budget
List all expenses and monthly take home
Find the difference (hopefully make more than spend)
Break it up into what you want to spend on all categories per month
Groceries, gas, Entertainment, etc
50 for necessities, food, mortgage/rent/car etc.
30 for wants: shopping, eating out, travel etc
20 for saving/investing
Pay Yourself first method or 80/20
Take 20% minimum for savings (retirement, investment, emergency fund)
Use the rest for expenses and fun etc.
Can adjust to 70/30 60/40 or even 50/50 based on how aggressive you are
Sub-savings Accounts Method
Have many savings accounts set up to funnel money into
Have names for all funds Ex.( Aruba vacation, down payment on car, Coachella)
Have target dates for each funds as well Ex.($3,000 for Aruba by July, $1,500 for down payment on a car by January, $800 for Coachella by February)
After you pick the strategy that suits you best, whether it be one of these or something else, it's time to put that baby to work!
Keep in mind that it will take some time to really get your budget down and in a good rhythm and habit of it. Just like anything new it will take some time getting used to.
The important thing is to stick with it and follow what you have chosen and laid out for yourself and your family.
The biggest rewards are seeing the positive progress with your new budget and the accomplishing of financial and other goals in the future because of it!
Here are 12 common Budgeting tips that really help keep you on track:
Budget every month before the month begins.
Budget to zero.
Track every expense.
Review your spending habits.
Set a realistic budget.
Adjustments will and must be made as you budget. This is common and okay. Many people think a budget is set and can’t ever be adjusted. This is just not true! It is YOUR money! You are in charge of it. This is what a budget is for. It puts you in charge!
7. Create a “Miscellaneous" category.
8. Budget for semi-annual expenses.
Car insurance premium, anniversary, etc. You can save up month by month for these.
9. Save for big purchases a little at a time.
10. Budget for fun.
Work this in each month for a little splurge or something enjoyable. The last thing you want to do is get burned out or too stressed out because of a "no fun" budget.
11. Understand the difference between needs and wants.
You can budget for both but needs get all priority.
12. Don't get too down on yourself.
You will make mistakes, you are human, we all do. Also, like any good habit you are trying to establish, it generally takes up to 3 months before you get the hang of this budgeting thing. So it's important to remember to be kind to yourself throughout the entire process. Whether that's in the beginning or anytime throughout this new lifestyle of yours.
Now lets go out there and get our Budget on!
You won't regret you did!