We are talking about budgeting tips again today. Many people see a budget as financial jail that will only prevent them from doing what they really want to do.
But that couldn’t be farther from the truth.
A budget is just a plan for your money. When you create a clear budget you will be spending your money with a purpose.
A budget actually gives you financial freedom.
15 Simple Budgeting Tips That Will Save You Money
Ready to get started? Here are my top 15 budgeting tips!
A Dollar Earned may earn a commission for purchases made after clicking links on this page. Learn More.
1. Have A Clear Goal
Going through all the work to create and stick to a budget is worthless if it is just to be able to say that you stick to a budget. You need to have clear goals in mind when you are making your budget.
Maybe you want to reduce debt, save for a wedding, vacation planning or build an emergency fund.
Understanding your goal enables you to modify your budget in order to meet those goals. Having clear goals in mind will help you stick to your budget when you feel like splurging.
2. Create Your Budget Before the Month Begins
Don’t wait will the first of the month to start thinking about that month’s budget.
Many of your bills may be due on the first day of the month so you will be trying to catch up on your budget before you even get started.
Completing your budget ahead of time allows you to plan for what is coming up instead of struggling to keep up with what already happened.
3. Budget Down To Zero
You need to create a zero-based budget. Now that does not mean that you will have zero dollars in your bank account. Budget your entire income, down to zero.
Give every single dollar a job to do.
You need to tell your money exactly what to do so you don’t wonder where it all went at the end of the month.
4. Create The Budget Together
If you are married, you and your spouse need to sit down and talk about your finances.
You two have to be on the same page about your budget. Your family can’t have a successful budget if your partner won’t stick to it.
5. Track Every Single Expense
Pull out your bank statements from the last few months and look at every single transaction.
Coffee, gas, food, lunch, everything. Add up how much you spend on each item and put it into your budget if they fit.
Once you know where your money is going you can easily see where you can cut back.
6. Make Adjustments Each Month
Keep birthdays, vacations, and holidays in mind. Whatever the occasion is make sure that you prepare for those extra expenses in advance.
Make adjustments to your budget each month as things change. You can create a savings fund to put cash into throughout the year and when the time comes you will have saved the cash and can enjoy the occasion.
7. Put Your Priorities First
Budget for you basic priorities first. Food, shelter, utilities, transportation, and clothing.
Once your basic priorities are taken care of you can fill in the rest of your budget.
8. Pay Off Debt
Paying off all outstanding debt needs to be a top priority.
Your debt is holding you back and robbing you of all your hard earned money.
Debt is your financial enemy so get mad at and kick it in the butt. Use the debt snowball method to get rid of debt as fast as you can.
9. Budget For Semi-Annual Bills
Remember those bills that only roll around once a year or every quarter.
These might be annual medical checkups, oil changes in your vehicle, or yearly membership fees. Set aside a small amount each month to cover those bills when they roll in.
10. Schedule Everything
The majority of your bills you can set up on auto pay through your bank.
Take advantage of these automations and sign up for every one available. Late payments can ruin your credit score in a flash so avoid missed payments at all costs.
11. Understand The Difference Between Wants And Needs
You may want to upgrade your iPhone but you need to repair your car so you can get to work.
Spend your money wisely by knowing the difference between your wants and your needs.
Sometimes it may be tough to put your wants on hold for a while, but if you do your finances will reward you later.
12. Save For Big Purchases
Need to buy a new computer or want to go on a Christmas vacation?
Treat these big purchases like a monthly bill and save up for them. Scrambling to pull the funds together before going on vacation can take all the enjoyment out of the trip.
Saving for them in advance and you will be able to enjoy them more.
13. Quit The Comparisons
If you can take care of your basic needs you have so much to be grateful for.
You probably have so much more than you even realize. Stop comparing your situation to someone else’s.
These comparisons will steal your joy and keep you from reaching your goals.
14. Cut The Budget
Make simple budget cuts now to make the future easier. By making things tight now you can pay down debt faster and build your savings.
Eat out less, cut the cord to cable, shop the grocery sales and sell things that you don’t need.
Just remember that things may be tight for a while, but these are just temporary to help you achieve your financial goals faster.
15. Invest Your Spare Change
Investing in your future is critical to your financial freedom. Investing can be challenging when you are on a tight budget and getting started can be scary.
Start with an automated investing app like Acorns. They round up your purchases to the next dollar and invest your spare change for you.
You can begin investing with just your extra change. It is a great way to get your feet wet with investing and help you save for the future.
One final bonus budgeting tips- Rember to cut yourself a break sometimes.
It can take a few months to get a handle on this whole budgeting thing. It won’t be perfect the first time, or the second. But you’ll get there eventually!
What are your favorite budgeting tips? What budgeting tips did you use when your were a beginner budgeter?