Budgeting often gets a bad reputation for being difficult.
But whether you find them difficult to make or difficult to keep, a budget will do you no good if you resist it.
The key to creating and sticking to a budget is to recognize that it’s really just your plan for your money.
The more arbitrary you make it or the more you let other people’s values and perceptions influence it, the less likely it is to work.
So to help you get started creating a budget you can not only keep, but learn to love, I’ve put together these budgeting tips for beginners.
Without goals or a purpose for your money you’ll always feel a bit lost and at odds with any budget you try to make.
Sit down and think about what you want for your future.
Is it the perfect house for your family? A nice vacation? Maybe it’s as
Whatever you want, set a target for achieving it, and integrate it into your budget.
Making your goals a part of your budget can be as
Incorporating your goals into your budget will help you keep focused on your priorities and start saving immediately.
Take it a step further and add a visual tracking component for your larger goals to make the process a little fun.
Find the Method That Works for You
There are several budgeting methods people use to help them control their finances.
I’m a massive fan of zero-based budgeting.
It’s the best way to get a grip on your spending and really tune into your core values and desires for your financial health. But it’s a little more work than some other methods.
If you prefer to keep things
The 50/30/20 budget method is a good place to start for ensuring you’re spending less than you earn, and still saving something while you pay off your debt.
Another method that works great for some people is switching to the cash envelope system.
Studies have shown we spend less when we use cash. If you’re a spender who struggles with going over budget, the cash envelope system may work well for you.
Track Your Spending
Possibly the best thing you can do to start taking control of your spending and make a budget you can keep is to track your spending.
It’s amazing how much the
Whether you use a budgeting app, the back of your cash envelope, or just a scrap of paper, start writing down what you spend when you spend it.
This forces immediate reflection and accountability.
No more hiding your head in the sand, pretending you’ll pay for it later.
If you’re tracking your expenses in your budget app or with your cash envelope you can also see at a glance how much money you have left.
Success in budgeting is all about awareness, and tracking your spending is the best way to find out where you’re spending and how much is left.
Review Your Variable Expenses
When we think about our bills, we tend to think about what we paid last month. This can be dangerous for your budget when it comes to variable expenses like your electric and gas bills.
We live in the desert so there’s a massive difference between our winter and summer bills.
Even though I know it’s coming, I’m still always a bit surprised when our bill quadruples every summer.
The best way to handle variable expenses like this is to look at your previous bills and average them out across the year.
Instead of setting aside the exact amount due each month, I budget the average.
In the winter, I build up a buffer in that category, so when summer comes, I don’t have to scramble to find extra cash.
In addition to keeping the stress at bay, it keeps my budget nice and predictable year-round.
Don’t Think Too Far Ahead
The best budget tip I ever got is to only budget out the money you have, not the money you expect to get.
We tend to think of budgeting on a monthly basis. But if you get paid less money more frequently, trying to plan out an entire month with the cash you have available may be impossible. Especially if you’re living paycheck-to-paycheck.
It’s incredibly frustrating to have more month than money, but you can overcome this by thinking on a smaller scale.
Assuming you’re paid more frequently than monthly, focus on only the expenses you have to pay before you get paid again.
By taking things one paycheck at a time, you’re able to get a handle on things without feeling overwhelmed.
Budgeting by paycheck like this is also a great way to build up your savings.
Instead of running out of money trying to stretch one paycheck to pay the whole month, you can focus on what that money needs to do until you get paid again.
Usually, you’ll have enough extra from at least one paycheck that you can put towards savings goals.
Use a Monthly Bill Calendar
Forecasting your income and budgeting money you don’t have is a recipe for budget failure.
Your budget is a way for you to assign your money to specific spending jobs. You can’t pay for something with money you don’t have. Forecasting with imaginary numbers creates a budget you can’t trust.
A monthly bill calendar is a great way to help you break the habit of forecasting your budget and start budgeting by paycheck.
It may seem counter-intuitive to use a monthly calendar to help you break free from a monthly budgeting mindset, but a visual representation of where your bills fall in relation to your paydays actually makes it easier to ignore the non-immediate expenses.
Write in all your bills and paydays on the calendar so you have an overview of the month ahead. Then adjust your budget to only plan for your immediate upcoming expenses.
Once you get paid again, you can budget out the remainder of the month.
Being able to see what’s coming up before you have to budget for it is a great way to break the paycheck-to-paycheck cycle.
Know the Difference Between Infrequent, Unexpected, and Emergency Expenses
One of the first things most financial experts advise is to build up an emergency fund.
While it’s sound advice, I think it’s also important to define an “emergency”.
Christmas, annual renewals, and other semi-regular expenses are not emergencies. Just because you tend to forget about them doesn’t make them an emergency.
Similarly, while car repairs and maintenance costs may be unexpected since we don’t know when they’ll happen, we do still know they’ll eventually pop up.
They’re unexpected but inevitable.
While some unexpected expenses may feel like an emergency, it’s important to keep them in perspective when compared to things like job loss or medical emergencies.
If you want to build a budget you can stick to you need to start anticipating and planning for your infrequent and unexpected, but inevitable expenses.
Set up sinking funds for these expenses in addition to building an emergency fund. That way you can continue to gradually build your emergency fund instead of continually depleting it.
Focus on Your Priorities
One of the biggest problems people have when trying to stick to a budget is not having defined their priorities.
The impulse to buy what you want, when you want it can quickly and easily derail your budget.
But having a clear purpose driving your spending decisions will make it easier to know which expenses are worthwhile and which you can ruthlessly eliminate.
Knowing what you value makes sticking to a budget much easier.
Determine your priorities and how your spending reflects them. Pretty soon, you’ll notice yourself refraining from the impulse expenses that used to throw you off.
Avoid Impulse Buys
Sometimes even being crystal clear on our goals and priorities isn’t enough to combat that craving for Taco Bell or resist that amazing sale on your favorite jeans.
Assuming you haven’t padded your budget in anticipation of these impulse buys, the best way to handle them is to impose a waiting limit.
Force yourself to wait 24 hours, or for larger purchases 30 days, before you commit to buying.
This self-imposed waiting time can have several positive effects.
- prompt you to do more research
- encourage you to comparison shop
- give you time to reflect on how it fits into your priorities
- reduce the desire for the item
- give you more time to budget for it
Giving yourself time to reflect on your purchase will reinforce your efforts to be intentional with your spending.
Even if you end up making the purchase, you’ll feel better about it and more confident in your decision.
Negotiate Your Bills
One of the hardest parts about budgeting is not having enough money to actually budget.
We’ve discussed adjusting the frequency of your budgeting so that you aren’t overwhelmed by upcoming expenses. But another way to ease the pain is to reduce those expenses.
You may have some bills that are mandatory for your way of life. Cell phones and the internet used to be relatively optional, but nowadays, it’d be hard to imagine life without them.
But that doesn’t mean you have to pay full price for them.
Call around and price check other services; then call your company and see if they’ll negotiate your rate.
Sometimes they may not budge and you’ll have to decide if you want to switch services. More often than not, they’ll find some sort of deal that you qualify for that can save you money instantly.
Remember to Roll with the Punches
My #1 tip for anybody struggling to budget is to roll with the punches.
Understand that unexpected things will come up, and you’ll need to adjust to compensate for them.
For years I was frustrated because our budget varied from month to month. I was expecting certain expenses based on the previous month, but things never seemed to add up the same way twice.
It took me a while, but eventually, I realized that there’s no such thing as a typical month.
Even if you think you’ve accounted for every possible scenario, I can guarantee you something you didn’t anticipate can (and usually will) come up.
Instead of throwing your carefully crafted budget into disarray, be prepared to adjust and adapt when things don’t go according to plan.
If you’re new to budgeting, the tips above will give you an advantage in building a budget you can keep.
Use what you’ve learned to navigate any roadblocks that pop up so you can make sure to adjust your course and reach your goals without abandoning your budget.
If you follow these budgeting tips for beginners, you’ll be budgeting like a pro in no time.