A pile of numbers from a budget.

9 Budgeting Tips Everyone Should Know

If you want to build wealth, you need to learn how to budget. You can not save money after all, if you do not know where your money is going. Unfortunately, budgeting does not come naturally to everyone. At Loan Monkey, we can help by giving you some budgeting tips that everyone needs to know. Take a minute and learn some of the tips and tricks that you need to have in your budget arsenal.

Learn To Budget Like A Pro

Yes, you can budget like a professional if you follow a handful of tips and put them into use. Let’s take a look at some of the tricks that budgeting pros use to make the most of their money.

A confident guy, pro.

  1. Plan As A Couple
    If you are in a relationship and share your income, you need to also share your ideas on budgeting. As a couple, you need to be on the same page or you could be facing some major problems. It does not good for one person in a relationship to make money plans if the other is just going to wreck them.
    Get together and make long term financial goals and then develop a plan that works for both of you. This might mean making compromises. One party might have to loosen the purse strings a bit while the other reigns in their spending. Find something that works for both parties so that you can reach your goal smoothly with minimal conflict.
  2. Budget For Every Dollar You Earn
    Your need to have a place for every dollar that you earn. If you take home $2000 every two weeks, you need to account for every one of those dollars.
    Now, this of course does not mean that you need to waste money on unnecessary expense. Take your paycheck, pay your bills and then divide the rest of your money up among savings and investment accounts. Fun money will get you nowwhere in the budgeting world.
  3. Focus On Debt
    If you are carrying large amounts of debt, it makes no sense to save money for retirement until it is paid off. Debt elimination should be the focus of your budget. No use putting money into an investment account earning 8 percent when you are paying 17 percent on credit card debt. You are losing money that way.
    To pay off your credit cards in the shortest time, focus on high interest offenders first. Pay the minimum on every card except the one with the highest interest. Pay as much as you can on it until it is paid off and then move on to the next highest interest. Keep doing this until you have eliminated all of your high interest debt.
  4. Brush Off Mistakes
    As you get accustomed to life with a budget, you are bound to have a few slip ups. Do not let these little financial indiscretions turn you off of living a more frugal life.
    Instead of letting mistakes derail your plans, brush them off and use them as a learning tool. Figure out what triggered your spending mistake and make changes.
    If it was internet shopping, erase your credit card information from your favorite websites. It is harder to make impulse buys if you must dig out a credit card.
    If it was going off the list at the grocery store, start having a snack before you go. Hunger is a major influencer when buying groceries.
    Whatever your trigger was, figure it out and learn from it.
  5. Set A Clear Goal
    It is hard to blindly save and make sacrifices when there is no finish line in sight. You need to have a goal in order to motivate yourself and it should not be something so far out that you can not see it.
    If you are 25 years old and your goal is to retire when you are 50, you might have a bit of a hard time staying motivated. Why not instead have a goal of saving 20,000 dollars. It is something that is far more attainable which will keep you motivated.
    Once you reach this first goal, reward yourself and then set a new one. Keep setting attainable goals and then raise the bar after reaching them.
  6. Leave Room For Surprises
    Not very month will be the same. Things come up that can change your budget. It could be as simple as a few birthday gifts that you need to buy or it could be a water heater that decides to go out. Whatever the case, you must have a little fluidity in your budget.
    This does not mean that you need to leave money unaccounted for however. Instead, put a small portion of money into an emergency savings account. Just 50 dollars a paycheck will build up quickly (1300 bucks in a year) and it will give you the money that you need in order to handle little surprise expenses.
  7. Audit Your Budget Regularly
    Having a written budget affords you the ability to audit your expenses easily. You can see where you are spending your money and can make cuts when possible.
    Try to audit your budget at least every 3 months. Investigate any possible means of saving money and take action. This could be shopping for cheaper auto insurance, choosing a more affordable internet provider or meal planning to cut food expenses. There is almost always a way to save money in even the tightest of budgets.
  8. Make Plans For Extra Money
    From time to time, you may come into extra money. The temptation is to blow this money as it is “found money”. This is a mistake and a lost opportunity.
    Whether the money is a windfall,a few extra dollars from some overtime or a 400 dollar bonus, you need to have a plan for it.
    With small amounts of extra money, it is probably a good idea to plan to divert it immediately into your savings account.
    For larger amounts, perhaps take a small amount, say 10 percent and treat yourself. The rest can go into savings or towards paying down high interest debt.
  9. Have An Emergency Plan
    Hopefully, you have an emergency savings, but you should also have an emergency plan. What would happen if you were to lose your job or suffer a disabling injury? You would need to make changes and make changes quick.
    Have an emergency plan that you can put into action immediately to cut back drastically on expenses. Know what expenses are luxuries and how to cancel them fast. Also, know how to trim the fat off of your necessity list. A good emergency plan could allow you to trim 20 percent or more off of your monthly bills. That, combined with a strong emergency savings, can help you ride out any storm.

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