1) Decide why you’re budgeting
Maybe you want to save up for a new car, or you have your eye on owning a house. Maybe money is tight and you need to be more careful. Or maybe you have plenty of money but can’t seem to save. Whether you have a little money or a lot, a budget is your friend. Developing a budget and having a plan makes it easier to follow through and achieve financial goals.
2) Use empowering language
The term budget may have a negative connotation to some, but it doesn’t have to. Think of a budget not as a restrictive document, but as a roadmap to your spending or a guide to keep you focused and help you efficiently achieve the lifestyle you want. A budget is not designed to intimidate or restrain you. It’s just an opportunity to take control of your money.
3) Track spending for a week
To develop a budget, it’s first helpful to understand where your money is going today. Keeping track of every expense for just one week to see how much money is being spent can be an eye-opening experience and can start to help you figure out where changes can be made.
4) Test out different methods
What works for you might not work for someone else. Experiment with how to track your budget. Try an app on your phone. Try a paper ledger. Read up on different budgeting methods and determine what works best for you.
5) Prioritize expenses and goals
Determine your needs versus your wants and categorize them accordingly. There are the fixed costs, such as rent and the electric bill, and there are variable costs like groceries and dining out. Finally, there are extras – things you want but really don’t need on a regular basis. Once these are sketched out, set goals for yourself. For example, “I plan to eat out only once a week.”
6) Leave room for surprises
We all know things come up, so be sure to leave some buffer money aside for a surprise expenditure or a last-minute opportunity that you just can’t pass up. Also, remember to reward yourself once in a while for all your hard work!
7) Revisit your budget monthly
Reflecting back on the month will help you determine what was spent, and how you can adjust accordingly.
So, there you have it – seven ways to level up your budget game. Remember, a budget isn’t a scary thing; it’s your trusty guide to handling your finances like a pro. Give it a try, have some fun with it, and see how it can bring you closer to your financial dreams. We have plenty of related tools and tips to share as well. Just give us a call and we’ll be happy to answer any questions you have.
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