Budget. It’s not anyone’s favorite word, but it’s one that most of us have to think about at least some of the time. Budgeting helps us know how much money we have, how much we need, and if the money we have is really going toward the thing we need. Building a budget might not be your idea of a good time, but it’s an important thing to do and it honestly doesn’t have to be difficult or time consuming. Here are a few tips that can get you started with how to make a budget plan.
Track Your Spending
Before you can really start to make a budget, you have to know what you’re actually taking in and what you’re actually spending. Tracking your spending is probably something you’re already doing in one way or another, you just need to pay attention to the data. Take a look at receipts, bank and credit card statements, or old checkbooks to see how much you’re really spending and on what. Take inventory of what is necessary, like groceries and rent, and what is enjoyable but not absolutely necessary, like going out to eat or buying a new thing. Once you know where your money is going, you will know where you can cut back and where you might need to add some funds.
Put Your Necessities On Autopilot
If you are not already set up on auto-draft for your recurring expenses, it’s time to make the shift. Setting recurring, necessary expenses to automatically draft out of your bank account immediately after you get paid every month makes sure that those are taken care of before you can spend on anything else. Set your utilities, credit card bills, insurance, auto payments, and even rent or mortgage payments to come out every month, and you’ll know that what is left in your account isn’t already promised to another expense.
Set Consistent Amounts
When you’re building your budget, try to build it so that your spending becomes a habit. Occasionally it may be that you need more money for gas or groceries than you will other months, but if you build your budget for consistent monthly amounts you will get used to spending within that range in no time. Before you know it, it will become habit to only spend so much.
Actually Write Down Your Budget
The budget spreadsheet isn’t for everyone, but it’s one of those things that you can’t know unless you try. If you aren’t particularly Microsoft Excel literate, you can always download a template that’s already set with the formulas you need, or use an online budget building tool. These days, there are even hundreds of apps that help you build, track, and balance your budget. Pick a tool, any tool, and track what you intend to spend along with what you are actually spending. This is the easiest way to make sure things align, and to help correct for them when they don’t. It’s going to seem tedious, but give it a few solid months before you give up. It gets easier with time, and you may just find you like being able to track your spending and savings goals that way.
Budget For The Unexpected
The unexpected happens. A Florida car or boat title loan may be there to help you short term, but in the long run you’re going to want to be able to build a bit of anticipatory funds into your budget to help keep things on track long-term. Set aside just a little for the unexpected each month. Chances are you’ll need it, whether it’s for something big or small. If you’re lucky enough to not have to use it, roll that money into an actual emergency fund. Gradually, that savings will grow and help prepare you for those much bigger cost emergencies, like medical bills or home repairs that you didn’t know were coming.
Don’t Forget To Have Fun
It’s a ridiculous misconception to think that just because you make a budget you no longer have any money with which to enjoy yourself. In fact, it’s encouraged to build a bit of fun money into your budget. At the end of the day, you work hard for your money and you’re going to keep working hard if you’re able to enjoy it a little bit. The type of treat you allow for yourself will depend greatly on your financial and personal needs and goals, but whether it’s a cup of ice cream, a night at the movies, a new piece of clothing or something for your home, or anything else you can think of, as long as you plan for it there’s no reason to not let yourself enjoy some of your hard earned cash.