1: Record your expenses: I know, this might sound tedious but when completing a proper budget and sticking to that budget, it’s important that you record all of your expenses. And yes, that might mean the stop at the coffee shop or that ice cream cone you had on your way home. Tracking your expenses month to month gives you an idea on where you can cut back, and where you can save more.
2: Save for retirement: While retirement might be the last thought on your mind, it’s important to start saving early so that when that times come you don’t have to stress. Look at your bills and your debt. See where you stand financially and be sure that you are putting money away for a savings plan but also try to put as much as 15% of your income away for retirement. Trust me, you’ll be thanking us when you retire.
3: Budget for the fun: I am all about having a good time in life, after all you only have one life to live. So instead of stressing yourself out with your budget and not enjoying life. Budget to have some fun! That’s right including splurging as a category on your budget. This will allow you to not feel guilty when you treat yourself so you’ll start to dread budgeting less.
4: Budget down to zero. If you make $3,000 a month budget down to $3,000 a month. This includes bills, groceries, retirement, savings, emergency funds, splurging and any other item you might have on that budget. Oh and don’t forget to include an area on there for vacations.
5: Budget for the expected: We’re often told to create an account to budget for the unexpected. To budget for emergencies that might happen but it’s always important to budget for the expected. Look at the holidays, birthdays and vacations that you have planned and budget for them so that you can stay ahead and not get discouraged come those special occasions.
6: Set realistic goals and stick to them: When looking over your budget and receipts, think about the items you’re purchasing and create a budget for those items. Don’t tell yourself okay I’m going to cut out coffee so I don’t need to budget for that. Chances are you’re not going to cut out coffee so it’s important that you’re realistic and have money set aside for that morning coffee run.
Budgeting doesn’t have to be a tedious task, if you’re doing it correctly. You shouldn’t be depriving yourself from life but rather reorganizing yourself and your goals. When you sit down to create a budget be sure to really stick with it and look back at the end of each month on how you did and where you could do better.
Enjoy budgeting and enjoy splurging too!
For more tips on how to budget effectively, read TFCU's Money Management Guide.
