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Budget Tips That Work For Everyone
Making a budget isn’t anything that gets most people terribly excited. In fact, a lot of people would rather watch paint dry than sit down and plan out their financial future. But believe me when I say that creating and adhering to a budget can change your life. Organizing your money in advance can help you pay off debt, save for retirement, and will even allow you to breathe easy between paychecks.
Preplanning where all of your income will go ensures that you know exactly how much you can allocate to the wants in your life after your needs are satisfied. It’s not just hyperbole when I say a little planning goes a long way. Read on for my top six budgeting tips that actually work!
Account for Every Dollar
It might seem self-explanatory. But I cannot overstate the importance of budgeting to zero. If you leave funds unaccounted for, they are much more likely to be mismanaged than if every dollar is spoken for in advance. I recommend the 50/30/20 rule. This strategy allocates 50% of your income to basic needs, 30% to wants, and 20% to savings and investments. If you don’t think you have any leftover money after meeting your basic needs, check out my article 12 easy ways to save over $1,000 a month.
Remember to Start Fresh Each Month
Tweaking your budget to your specific needs is of paramount importance. The 50/30/20 rule is a great jumping off point and it works well for many people. But your specific situation may require some adjustments. It’s important to take stock at the end of each month to figure out what worked well and what you need to change going forward. Many people find it useful to divert a portion of their 20% earmarked for savings to an emergency fund. The unexpected is the enemy of any budget. If you can proactively plan for unforeseen circumstances, you are more likely to make a quick recovery if or when you are blindsided.
Also See: How to Create an Emergency Fund Today!
Make it a Group Activity
If your finances are conjoined with a partner or spouse, make sure that both parties agree on the budget before you establish it. You are much more likely to succeed if both you and your partner are fully bought in and on the same page. Managing your money together not only ensures your financial stability for the present and future, it’s also a great way to stop arguments about money before they start.
Check in on Your Goals Before the Month is Over
It is certainly important to track your progress at the end of the month. But it’s equally important to keep tabs on how you are getting along before the end of the month. Weekly or even daily check-ins are advisable when you are working with a new budget. The greater your oversight, the higher your chances of successfully sticking to the plan.
Take Advantage of the Plethora of Budgeting Apps and Websites at Your Disposal
Mint.Com has some great tools to help you take control of your finances. But it’s far from the only option. There are a number of resources available and many of them are free. Finding a budgeting tool that fits your lifestyle is a tremendous time saver and a highly effective way to help you stay on target. We can help you find the right budgeting app.
Remember that Practice Makes Perfect
Don’t let yourself get discouraged because you didn’t adhere perfectly to your budget for the first month. Oftentimes, it takes two or three tries to find your stride. Like anything, budgeting requires practice and the more you do it, the more successful you will be. Just having a budget (even if you don’t nail it right out of the gate) is a major step in the right direction. And the very fact that you are trying is progress in and of itself.
Finally, we can show you how to create a budget even if you are broke. Anyone and everyone should do it, so start your budget today if you haven’t.
How important do you think budget and budgeting is?