Quick budgeting tips that you can use today!
We all know the feeling – after a rough month where you know you overspent, you dread looking at your bank account, hoping if you ignore it, then you don’t have to face the music. Of course, we eventually need to look and sometimes it’s not as bad as we thought and other times its worse.
This week, we are going to bring you a few budgeting tips to help take the anxiety out of planning and spending your money.
Quick budgeting tips:
Budget to zero
When you budget to zero, you are taking all of your income for the month and assigning every single dollar to a category. You go through your categories – expenses, savings, fun money, etc., until you hit $0 leftover. Obviously, you do not need to spend all of your money in the month, you just need to give every dollar a “home.” Taking a stricter approach with you budget can help shake you out of bad money habits such as impulse spending.
Create a buffer category
A buffer category is a line in your budget for any miscellaneous expenses that may unexpectedly pop up throughout the month. Typically, $50 is appropriate for a buffer and can be used for little incidentals like the grocery budget going slightly over or needing to fill up the tank an extra time during the month.
Remember that every month is different
Whether its an oil change, holiday shopping, or a big birthday, each month brings different expenses to the table. A one-size-fits-all budget may look nice and organized in theory, but it does not work in reality. Take some time to sit down each month and tweak your budget to suit your specific needs for the coming weeks.
Track your expenses!
This is no fun, I know, but it’s incredibly important. There’s no point in sitting down and drafting up the perfect budget if you don’t stick to it. Track your spending to see how quickly you are getting through each category of your budget. This will also help you make any adjustments necessary in future budgets.
Budget for annual/semi-annual expenses
Things like auto insurance, property taxes, and back-to-school shopping have a tendency to sneak up on us. In order to avoid being blindsided by a big bill, break these large payments down into monthly expenses and set them aside in a savings.
Use separate accounts
This is essentially a simplified version of the envelope budget. Keep separate checking accounts for discretionary and disposable income. Each paycheck, transfer your disposable income into an account specifically for bills. This way, you can use your discretionary without stressing about whether or not you have enough money leftover for the electric bill.
Budget for fun!
There is nothing worse than treating yourself to a nice dinner or new clothes and feeling guilt over spending the money. To avoid this, put a line in your budget for fun money. This way, you can feel free to splurge on more “frivolous” things without feeling the guilt that is often attached.