11 Successful Budgeting Tips for You
Dive into 11 successful budgeting tips for every budgeting level.
For beginners, learn tips on how to get started with your own personalized budget plan, easy ways to strengthen your foundation, and simple ways to start off on the right path.
For expert budgeters with established goal setting strategies, learn and experiment with ways to improve your current budget to hit your financial goals faster.
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Budgeting Tip #1: Start Early
One of the best ways to get started is to start early. Taking time to plan for things now will save time and energy in the future.
For example, we look at our calendar and noticed that our car registration and renewal happens at the same time every year for $120.We divide that amount by the number of months until the payment date and place a line in our budget for the expense.
If there were 5 months left, we would need to save $24 each month to cover the expense. Similarly, if there were 12 months left, we would only need to save $10.
This ensures that when the time rolls around, we are not scrambling around to cover the expense. It is not a surprise in our budget because we have already planned for it.
By saving a little bit each month, we have enough to pay for the car renewal and registration fees. Knowing that the necessary expenses are covered provides the ultimate peace of mind.
Budgeting Tip # 2: Create a Personalized Budget that Works for You
The definition of a successful budget is one that works for you. There are so many different variables, situations, and circumstances between people. What works for a good majority may or may not work for others.
There are so many different budgeting plans out there. It always helps to so some research to get a better understanding of each. Then, see which one makes the most sense for our lifestyle, needs, and level.
Therefore, start by picking a plan or mix & match a few. Then, start experimenting to create a personalized budget for you. Make sure that you’re honest and realistic with yourself throughout the process.
Budgeting Tip #3: Stick to Your Personalized Budget Plan
Each day we are faced with so many choices that we must act upon. We can use our personalized budget plan to help guide our decisions.
In fact, we can start by simply asking ourselves, “Would this help align me with my budget/goals or take me further away?”
Another suggestion is to review your personalized budget plan in the morning and/or before bed. This helps to bring more awareness to your budgeting goals and working in the background of your mind.
A budget only works when you do. So do your best to build consistency and play with what habits help you stick to your plan.
Budgeting Tip #4:Track and Build Upon Your Personalized Budget Plan
As soon as you start a budget or decide to try something new, track your progress for at least a month. By that time, you’ll have enough information to work out the kinks.
The more that we practice, month after month, the more opportunities we have to iron things out.
If a particular budget or just a particular part is not serving you, don’t force yourself to make it work. Instead, experiment with other ideas that could work better.
Build upon the things that work for you. Ask yourself, “Is there something I can do to level up my budget even more?”
With time and consistency, you will certainly find your rhythm.
Budgeting Tip #5: It’s Okay to Change
It is perfectly okay if you decide to change your personalized budget plan later down the line. There’re so many instances in life when this needs to happen.
Perhaps when you were first out of college, just learning about finances, or had a lot of debt, you need to have a strict budget. In due time, your wealth will increase. By that time, you may decide to switch to a budget that requires less hands-on attention.
Or you decide to have a family and your financial goals have changed. As a family, y’all transition from a flexible spending budget plan to a zero-sum budget. Assigning every dollar to be used on things that you truly need or want.
Life will continue to change, from the ups (huge promotion, new job, marriage, children, etc. and the downs (job loss, divorce, medical emergencies, natural disaster, etc.) During those seasons, it’s a good idea to re-evaluate our personalized budgeting plan and make any adjustments along the way.
Budgeting Tip #6: Take Advantage of Helpful Resources
There’s no doubt that we have so much information and knowledge available to us in this day and age. We have an infinite number of ways to learn and easy access to a wealth of resources at a push of a button.
Through so many different channels, we are bound to find something that will add value to our lives. So, take advantage of all the helpful resources available. No one ever has to do it all alone.
With the help of products and/or services, we can achieve our goals at a much faster rate. Here are some personal finance tools that helped me out in the learning process.
- Apps: Mint, YNAB
- Websites: Personal Capital
- Books: YNAB, Broke Millennial
- Podcast: ChooseFI
- Blogs: Broke Millennial, huge list of personal finance blogs from the themoneymix.com
- Computer: Excel, Google Sheets
- Financial Advisor/Planners
These are just a few that I’ve come across, but there are PLENTY of others out there.
Budgeting Tip #7: Create Routines to Keep You on Track
Similar to a morning routine, create daily, weekly, monthly, and/or quarterly routines to make sure that you are on track to reach your goals.
The purpose of creating a financial routine is to get your brain in the habit of completing a simple but important task. Usually, these are repetitive tasks that need to be done.
Creating a routine helps to reduce decision fatigue and becomes one less thing that we have to remember. It also allows time to focus on what really matters in order to move us closer to our goals.
Start by reviewing your financial goals. Then, work backward in creating a quarterly, monthly, biweekly, and daily routine or checklist.
For example, if you use the zero-sum budget for one month:
- Daily:
- Read budget goal for the month out loud
- Put all receipts a box next to the computer
- Confirm expenses in YNAB, throw away confirmed receipts
- Look at tomorrow’s schedule
- What expenses are coming up?
- Where can I save some money?
- How can I make some money?
- Bi-weekly:
- Take pictures of receipts for work, email to self/file them, complete expense report, and then throw away.
- Review the budget for the past two weeks
- What worked? What did not? How can I improve?
- What expenses are coming up? Can I cover them?
- What expenses can I decline now?
- E. Declining a social event that does not add value to your life.
- Monthly:
- Determine budget goals and what is needed to accomplish them
Budgeting Tip #8: Set a Date in the Calendar for a Budget Check-In/Review
Experimenting for a couple of weeks or months. Then, set out some time to review your budget and spending habits.
Seeing the bigger picture, you may be able to notice some mindless spending habits and what can triggers them. For instance, you notice that each week you always go over on your food budget.
After doing a little digging, you connect the dots. The overcharge always happens after a night of drinking. You easily spend $20 at the taco shop that is open after all the bars close. Additionally, the next morning, you spend another $50 during brunch because it is hard for you to say no.
Although a night of going out with your buddies is in your budget, the extra $70 for late night tacos, chicken + waffles, and bottomless mimosas was not accounted for.
With this information, it can help adjust your current budget to be more realistic or guide you in making decisions that aligned with your budgeting goals.
Here are some questions to ask:
- What is working/not working? What are some ways to improve? What changes can I make to reach my goals?
- Are my actions/decisions in alignment with my goals?
- Is my budget realistic? Am I being honest with myself?
- What are some unhealthy triggers I can let go of?
Now, set a recurring appointment on your calendar with yourself. Use alerts and notifications to remind you to do a check-in/review. This process is important in helping us to measure our progress.
Budgeting Tip #9: Hone in on Your Budget and Spending Habits
Take a good hard look at both of your fixed and variable expenses. Devote a few hours or a half a day to review all of your subscriptions, insurance plans, and recurring monthly bills.
Usually, you’ll be able to find creative ways to cut back on these costs. This step below may help you shave hundreds of dollars off your fixed expenses for the month.
“If you can cut back on some variable costs in addition to your fixed monthly bills, you free up more money to save for retirement, build an emergency fund, pay off debt, or invest” from the Balance.com
Fixed Expenses
Most first time budgeters start off eliminating things from their variable/discretionary/every-day expenses.
Although, cutting back on variable expenses is often needed, it is some of the toughest expenses to cut back on. They required a daily commitment to align our actions with our goals. With how unpredictable humans are, we know that it’s not always easy and temptation can easily set in.
Fixed expenses (necessities) usually take up a good chunk of your budget, like a car or rent/mortgage payment.
Finding ways to reduce any savings in these categories can have a huge impact. Not only do you save $$$ on your fixed expenses each month/year, but you also don’t have to deal with constant decision fatigue.
Cutting down fixed expenses will require investing a few hours of your time. The good thing is that the decision is made once and tends to last for several months or years. So you don’t feel like your cramping your lifestyle or have to always fight your temptations.
So start by reviewing your fixed expenses and the best options for you:
- Shopping around for a less expensive health insurance premium, cellular phone plan, home internet, cable, etc.
- Consider moving, downsizing, refinancing, or getting a roommate
- Negotiate/trim bills: utilities, internet/phone, etc.
- Check out the Trim app that automates ways to save by negiotiating lower bills for you.
- Get a fuel efficient car, carpool, walk/bike, eliminate unnecessary trips
- Look into refinancing or consolidate loans for a lower interest rate
Variable Expenses
Whittling down on variable expenses can sometimes feel like a huge dread. When people think of budget this is what they think about.
The Balance says it perfectly:
“Trimming variable costs, on the other hand, requires actively making multiple decisions every day about whether or not to buy certain items or participate in specific events.”
Take a look at your just discretionary spending. List each item with the costs and then rank them in order of importance. Put the things that you cannot live without at the top.
Look over the list. What items can you cut completely/reduce/downgrade/split so that you stay within your budget and not sacrifice your sanity.
This will help to focus your spending on things that add to your quality of life. It will also help make the idea of budgeting easier and less stringent on your lifestyle at the start.
With some flexibility, it prevents us from completing giving up altogether. As you eliminate debt and continue to build wealth, the more freedom you have to choose where your money will go.
Budgeting Tip #10: Find a Different Way
As always, there are multiple ways to do things and multiple solutions to every problem. Along with decreasing your spending in order to save money, think of ways to increase your income.
For instance, so many people earn passive income by renting out a spare bedroom in their house.
Depending on how much they receive, it could be enough to cover the morning latte needed to stay productive each day. Or better yet, a good chunk to of change to help eliminate debt.
In some instances, earning more income can make a much bigger impact than cutting expenses.
- Negotiate a raise or promotion
- Change jobs
- Sell your services/expertise
- Start a business
- Create a side hustle
- Sell unused items, books, collectibles, etc.
- Rent your stuff:
Get creative! Tony Robbins once said, “the only limit to your impact is your imaginations and commitment” and it’s the truth!
Budgeting Tip #11: Constantly Experiment What Works Best for You
Try to think of your life as an experiment. There are so many variables and we are doing our best to eliminate the ones that don’t fit into our dream lifestyle.
If something doesn’t work, it doesn’t mean you have failed. It means that you found something that does not work for you. It brings you the clarity to move on and try something else.
As you go through major life changes, some things will continue to work and some will not. Be flexible and gentle on yourself. Continue to play around and experiment with what works best for you.
Wrapping it up
Now that you’ve learned a bunch of new tips, mix and match them to personalize your budget. Keep the experimentation going to create the best budgeting habits to keep you on track to reach your financial goals.
What it all comes down to it, successful budgeting will be different for everyone. Try incorporating one tip and see how it goes. You’ll either get the hang of it or need to try another tip that clicks with you.
We have the power to alter our future but it starts with what we do in the present. Apply your knowledge to help you conquer budgeting and reach all your financial goals. The power is in our hands and we can all do it!
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Let’s Talk About Budgeting Tips:
Have you had budgeting success?
If yes, what has helped you?
If no, what could you have done differently?
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