Financial

Tips for Better Personal Budgeting

Photo credit: US Airforce

We all know that budgeting is important for anyone, whether you’re single, or have a family. If the idea of budgeting has you feeling stressed out, you’re not alone. While it may feel like a daunting task, creating a budget is actually much easier than you think.

These helpful tips will have you sticking to a budget in no time.

Start small–set goals

Before you make any changes, it is important to start with a goal in mind. Do you want to get out of debt? Save more? Pay off your mortgage early? Whatever your plan is, pick one goal and stick to it. There may be many things you’d like to accomplish financially, but it is important to start small and work towards your goal.

While you work toward your goal, check your progress. Know where you are and what you need to do to meet your target. Aim for small victories, like paying off a small debt or saving your first $50.

Save first

If money is tight, saving may seem like an impossible goal. This is where setting a budget comes in. Budgeting allows you to save money, and it’s less painful than you might have thought.

Start with $1. As simple as that may sound, opening a savings account and putting just a single dollar in sets you up for the future. You can auto draft small amounts ($5 or $10 a week adds up quickly!) to move to your savings account on payday. No matter what you do, pay yourself first.

Enjoy peace of mind when you squirrel away even a small amount of money for the future.

Track spending for a week

For one week, track every dollar you spend. This will help give you an idea of the bigger financial picture to understand where your money is going. Use a budgeting app to track every expenditure in real time.

There are going to be regular expenses that must be paid, such as rent or a mortgage, car payments, insurance, utilities and the like.

You’ll also have other expenses like car repairs, entertainment, and gifts that are going to be less frequent, but still part of your spending. Track those too.

After you’ve tracked your spending, you can see how much is left at the end of that period, and plan accordingly, or see areas where you need to improve, like not eating out so often, for example.

Pay down debts

Getting out of debt is a goal for many Americans. Owing debt can be stressful, and thinking about paying it down can be equally stressful. Setting a budget and small goals an help you tackle that debt one dollar at a time.

Stop using your credit cards. This is a big one. Focus on ways to reduce credit card balances such as debt consolidation, getting interest rates reduced and paying off your smallest debt first. Paying small amounts now may not seem like much, but these small changes can mean big savings for you in the long run.

Treat yourself

It is important to reward yourself, or your family, when you start meeting your goals. What’s the point of making these changes if you can’t reap the benefits, right? Coupons are a great way to reward the entire family when you’ve made progress. Use coupons as a reward for a job well done to earn money, a gift, a meal out, or some other treat. Treating yourself doesn’t have to be expensive–small extras can mean a lot, especially when working toward financial goals.

See? Budgeting is easier than you thought. Adopting small changes can help you achieve your financial goals. Happy budgeting!