Keeping track of your money starts with creating a budget. When you make yourself aware of where your money goes each month, you can start to tackle your financial goals. Here are some tips to help you budget like a pro.
First Things First
Responsible budgeting means funding your most important expenses first. These are the things that are essential for survival. Food, shelter, transportation, utilities and clothing are all things that need to be taken care of in order for you to function. Once you have these key categories paid for, you can start to ascertain where the rest of your money should go. Prioritizing essentials will help take some stress out of the equation. Knowing your basic needs will be met each month will bring you peace of mind.
Cash Categories
If you struggle to stay on budget with things such as dining out or groceries, make them cash categories. This means you take your budgeted amount of money directly from your account. When you make purchases with cash, you are much more likely to avoid overspending. Having a physical and finite amount of money is very different than mindlessly swiping your card. This strategy will definitely make you more aware of prices and help keep you in line. If you really want to up the stakes, leave all your cards at home (or in your car). This will ensure you take the cash rule seriously!
Schedule it All
Surprises are not ideal when it comes to your budget. Keep things nice and predictable by creating a financial schedule. An article written for daveramsay.com states, “While you’re making a budget part of your monthly routine, why not pick specific dates for other expenses? Set up auto drafts out of your checking account to pay bills, and buy your groceries on a set day every week or twice a month. When you know what to expect and when to expect it, you take a lot of stress and potential pitfalls out of the picture.” Creating a schedule for your money schedule is an incredibly easy thing you can do to help keep your budget on track.
Set Goals
Identify your financial goals. Do you want to pay off your credit card? Student loans? Maybe you want to save money for a down payment on a home or vehicle. Regardless of what it is, set a measurable goal for yourself. Break your payoff or savings amount into monthly increments that you can afford. Not only are you designating money every month to go toward your goals, you’ll be able to effectively measure your progress. Knowing how long it’ll take you to pay something off or save a certain amount will help keep you motivated.
Budgeting doesn’t have to be something you dread. Make it fun by setting goals for yourself. Be patient throughout the process. The best thing you can do for your financial self is to get started.