7 Budgeting Tips for Every Type of Budgeter

Budgeting doesn’t have to be unbearable. Whether you’re a first-timer or have struggled to budget in the past, these budgeting tips can make it less painful and more likely to stick.

1. Decide why you’re budgeting

Start by articulating what’s inspiring you to create a budget. Are you overspending, in debt or looking for expenses to trim? Maybe you’re saving up for something, like a wedding or new baby.

When budgeting with a partner, discuss the details together to ensure you’re on the same page.

2. Use empowering language

The term “budget” can be off-putting.

Try switching to language you’re more comfortable with, such as “spending plan,” to help keep you motivated.

A budget — or whatever you choose to call it — shouldn’t intimidate or restrict you. It should be an opportunity to take control of your money.

3. Select your budgeting method

Just as there are many reasons to budget, there are many ways to budget. Read up on different budgeting methods — like the 50/30/20 budget or the cash-based envelope system — and try one that fits your lifestyle.

If you give it a fair shot and can’t find a way to make it work, explore other options.

4. Prioritize expenses and goals

Understand the difference between needs and wants, then focus on the essentials first — those include groceries, housing and transportation costs. That doesn’t mean other expenses aren’t important, though. Your financial goals, such as paying off debt or saving for retirement, should still receive attention.

5. Leave room for surprises

Don’t expect your budget to be perfect. Surprises will happen, and some expenses may slip through the cracks. But you can take precautions to soften the blow.

Set aside a little bit of cash to cover miscellaneous expenses each month and make regular contributions to an emergency fund. That way you can handle an unexpected car repair or other emergencies without taking on credit card or loan debt.

6. Automate responsibly

Technology can help alleviate the tedious aspects of budgeting and prevent setbacks. Try setting up automatic transfers so you can regularly pay bills or sock money away without thinking about it, and lean on apps and tools to conveniently track your spending.

7. Revisit your budget monthly

Checking in on your budget at least once a month gives you the chance to deal with fluctuations in a timely manner. Depending on your style and the method you choose, you may decide to check in more frequently — that’s OK, too.

Source: NerdWallet

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