During difficult economic times, it can be difficult to improve your financial situation. Wages are…
Having a budget that you consistently stick to can help you keep your cost down on a weekly and monthly basis, giving you more money to save and invest. While saving a small amount of money each week from smart budgeting might not seem like much upfront, over time it can add up to a staggering amount of money.
Start With a Monthly Budget, Then a Weekly Budget
Start by doing your monthly budget. If you’ve been tracking your expenses, then use the data from the last few months as a guide. If you don’t know how much you’ve been spending over the last few months, try your best to make estimates.
Once you have your monthly budget, then move on to your weekly budget. The monthly budget usually feels like a far off goal; but a weekly budget quickly becomes a lot more concrete. You can plan a weekly budget and be able to see in the next few days if you’re on track to hitting that goal or not.
Budget in Fun and Miscellaneous
Two things that people tend to forget to include in their budgets are activities for fun and miscellaneous expenses.
Just because you’re budgeting doesn’t mean you should cut back on all your “for fun” expenses. Just the opposite, in fact. By budgeting in fun, you’ll be able to increase your quality of life while knowing you don’t need to feel guilty about spending money because you know you can afford it.
Miscellaneous expenses are bound to crop up in life. Instead of trying to keep them out and missing your budget, it’s much more realistic to just factor in 10% or so for miscellaneous expenses.
Use Cash to Make Sticking to Budgets Easier
One of the easiest ways to create a budget and stick to it is to withdraw all the money you need to spend in a week out in cash. That way, you can concretely see how much you’re spending every time you hand over a $20 bill. You’ll see how much you have left to spend every time you look in your wallet.
It’s so easy to just swipe a credit card at the grocery store; but if you’re only looking at your bank statements once a week it can be so easy to forget how much money you’re really spending.
But when you’re limited to actual cash on hand and now credit card or even debit card spending, the confines of your budget become a lot more tangible.
Give Yourself 2 to 4 Weeks
Don’t be too hard on yourself for the first couple of weeks. If you go over your budget because of unexpected expenses or just bad estimations, it’s only to be expected. Much like any other skill, you won’t be an expert when you first start out budgeting.
For the first 2 to 4 weeks, set your budgets carefully, but don’t beat yourself up if you go over them. Then progressively learn to be more disciplined in your spending.
It takes about 30 days to develop the habit. But once you develop the habit of keeping a realistic budget that you really stick to, your bank accounts will quickly start to improve.