1. Budget before the month begins or next pay. Create your budget ahead of time so you are ready when the month begins. Always know what your monthly budget is, and what income you will have going into that budget ahead of time. That way, there are no surprises when it’s time to manage your money.
2. Budget to zero. Spend all your income on paper in your budget long before you get it. This way, you have an account of where every single dollar goes before it is in your hands.
3. Track every expense. Track your transactions throughout the month. Sometimes we may budget more for something, than we spend on it and sometimes vice versa. A budget is a changing thing! The next budget you make you will know what you need where and be able to adjust it.
4. Make adjustments. You can always adjust as you go. If you have less money in your entertainment fund, but extra somewhere else and you want to do something, you could move some money around. Maybe pull a few dollars from your restaurant budget instead. It’s okay to make some adjustments if it helps keep your spending on track.
5. Create a miscellaneous category. This category is a good one to have in a budget. We won’t forget to budget for the house payment, electric bill or gas for our car, but what about the unexpected things that pop up? If you need money put back in this account, it’s there for those times to use as you need to. It gives you a bit of freedom in your structured budget.
6. Budget for semi-annual expenses. From vet checkups to car insurance, budget for once-in-awhile expenses by saving a smaller amount for a few months before your bill is due. This can help lower your cost, too. For instance, some insurance companies give you a discount if you pay for 6 months at a time or a year. If you put that money aside monthly in your budget, it’s still manageable for you and you will always have that bigger payment ready to go. *Added plus is if your checking account gets interest, you can even put extra money away by keep a larger amount in there for that time!
7. Save for big purchases. Fun stuff like Christmas and summer vacations can blindside you if you aren’t thinking about them until a month or two before they arrive. Rather than scrambling to save at the last minute, put aside a smaller amount of money each month to stay ahead of your savings goals. This will help keep your spending in check when the time arrives too—and no more debt to credit cards after the vacation or holiday season!
8. Budget for fun. When you budget it’s important to remember fun things and put them in. When you are putting a little to those enjoyable things every month or pay, it gets exciting to see it grow and be able to be used where you need it! What started out as an overwhelming chore will become fun to do if you be sure to include your hearts desires in it!
9. Update your budget every month. Some budget categories will stay the same month to month, while others will change—and that’s okay! Look over your budget before the new month begins and make adjustments as necessary. For others, maybe updating your budget bi-monthly or even weekly to start to be sure you are keeping things in check may make it more manageable—especially if you haven’t even paid attention before! It will be a good habit to get into and will make you an expert on your finances.
10. Understand needs and wants. Maybe you want to go on vacation, but your air conditioner needs to be replaced. Understanding the difference between needs and wants will do wonders for your budget!
11. Set a realistic budget. A budget won’t do you any good unless you make it work for you. It doesn’t matter what someone else may spend on groceries, what do YOU spend on groceries and need? If you don’t be realistic about what you will spend, you will end up over budget every month and have trouble getting back in the black!
12. Give yourself grace. It takes about three months for your budget to “settle in.” If you need to adjust the numbers, or if life throws you a curveball, don’t be too hard on yourself. Budgeting takes practice, so don’t beat yourself up if it isn’t perfect right away. It may even take you longer than that if you have an adjusting income all the time, or adding to your family, or moving….you get the idea. Just keep at it and before you know it, budgeting will become something that is more natural to you than you thought…and as you save and make your money work for YOU, it may even become something fun!