Show notes
Here are my top 10 budgeting tips so you can manage your money better and start living the life you want!
Resources mentioned:
The H.O.P.E. Money Roadmap (www.budgetsmadeeasy.com/HOPE)
The 7 Day Pay What You Want Budget Challenge (www.budgetsmadeeasy.com/budget-challenge)
Full transcript:
Hi, guys. Today, I'm going to be talking about 10 budgeting tips. These work great for beginners. If you have a low income, if you just can't figure out why you're not saving any money month to month, these 10 tips will help you get on track with your budget and start saving money so you can pay off debt and live the life you want.
Number one, the number one budgeting tip is be realistic with your income and your expenses. More than likely, you are spending more on certain categories than you even realize. This is true for me and this is true for numerous families that I've helped.
This is why the very first thing I have you do when you're starting your budget is track your expenses and where your money has been going for the past month to three months. Because more than likely, you may think that your budget and what you're spending is this amount, but most of the time it's way bigger. For example, before I started really taking a hard look at our budget, I was budgeting like I think on paper like $800 a month for food. This is for a family of four, one being a newborn. She really didn't cost much. When I went through back through our spending, we're actually spending like $1200 on food. I was spending a ton of money at the grocery, a ton of money eating out.
We were throwing away all this food anyway. It was just wasteful. Now we spend $600 a month on food, which includes eating out.
Number two, revisit your budget at least once a month. It's a set it and forget it type of thing. Things may come up in the month that you didn't think about. Things change. You need to keep an eye on your budget. Otherwise your spending will get out of control and you'll be back to wondering where your money went.
Number three, examine your expenses and cut costs. Look at your budget, prioritize your spending, and figure out what you really need and what you really want, and then figure out how to make it work in your budget. If you can't, start cutting things out that you can't afford.
Number four, make budgeting fun. It shouldn't be this overwhelming, dreadful thing that you just avoid because you just don't want to deal with it. Make it fun. Have budget meetings. Bring snacks. Play around with the numbers. Just dream about why you're doing what you're doing and what you want to get out of it. Make it fun,
which brings me to
number five, which is include fun and savings as expenses in your budget. You don't want your budget so tight that you can't even do what you want to do. What's the point in that? If you make it so restrictive, you're not going to stick with it. Okay? You need to include having fun, realistic amount of money here, having fun and then of course, savings as expenses.
Pay yourself first and have a little fun. That will it make easier to stay motivated, keep going and reach your goals.
Number six, make a new budget for every month. The budget is generally the same month to month, but you still have to examine different things for each month. You've got seasonal expenses. You've got different taxes, vehicle registrations. You've got different things for each month. Your general framework of your budget maybe the same month to month, but you still have to look at each month and see what you need to adjust for that month.
Number seven, use savings funds for expenses that aren't monthly. Savings funds are sinking funds. Sometimes when I say that, people don't know what I'm talking about.
Sinkings funds are just savings funds for things like Christmas, clothes, gifts, holidays, vehicle maintenance, house maintenance, savings, your general savings account. All those are four things that don't come up month to month. I pay trash quarterly, so I have to save for that. There are certain things that you need to keep in mind that you need to put in your monthly budget that doesn't come up every single month.
Number eight, keep it simple. Don't over complicate it. Don't overthink it. Do what works for you. If you're nitpicking what to put, one item, which category to put it in, it doesn't matter. It's your budget. Put it in whatever category that you want.
The point is is that you plan for it, you have the money for it and that you need to track it. It doesn't matter. You can put paper towels in your food budget. That's what I do. You can make a housing budget. That's fine too, but don't make it overly complicated. You don't want to have to go through the grocery store line with 10 different transactions so that you can keep track of it. If you want to put everything that you buy at the grocery store under food and groceries, do it. Just adjust it so you have money in your food and grocery budget to cover it. Don't make it overly complicated. Don't overthink it. Keep it simple.
Number nine, plan for it to fail.
Especially in the beginning, you're going to screw it up. You're going to make mistakes. I still make mistakes. Nobody's perfect. It's going to fail from time to time. That's why you want to have a plan for what you're going to do when that happens. That's what your savings and your emergency fund are for. That's what you need to do mentally is prepare for it to fail, so that you don't give up when it happens because it will happen.
Number 10, have a miscellaneous category. This is for all those little things that are just so minuscule that you didn't even think about putting it in the budget, but you don't really want to put it in some other category because it's just minor.
This could be things that you have forgotten. It could be just something small. You want to stop and grab something at the grocery, at the convenience. You make a mistake in your budget, this is kind of like your buffer. Most things you can cover with a category, but there maybe something that comes up that you just didn't think about or didn't plan on, or you're not to the point where your savings funds are fully funded, or you may have money for one thing and forgot that there's something else in that category. That's what your miscellaneous category is for. Keep that in mind. Plan for it to fail. Give yourself some slack.
Know that it's going to take time to really get the hang of this and feel like you know what you're doing. It can take like three months to make a new habit. Just keep that in mind. Don't give up when it fails and things don't go the way that you planned. You just got to keep going. That's how you make the changes for the long-term that you need to do so that you can get your finances in order, pay off your debt and start living the life that you want. There's no point in just keep going and going and going in a dead end job when you can make some changes, improve what you need to do and live the life that you want stress-free, about money anyways, and keep going.
Be sure to subscribe, like, comment, share. Let me know what is your biggest budget category and what you do in your budget so that you don't forget things that just... just always feels like it's something, right? Also, I've got the top 10 budget tips in a handy little printable. I will drop the link for that. Be sure to grab that. It's free. I will talk to you later. Bye.