Budgeting Tips

Have goals in the budget that mean something to you. Listen to the voice in your head. Be in a positive frame of mind when creating a budget. Build in the "oops factor".

Here are practical budgeting tips to create a budget you will want to stick to.

  1. Have goals that are meaningful to you.
  2. Listen to the voice in your head.
  3. Be in a positive frame of mind when you create a budget.
  4. Build in the “oops factor”.

You have money. Ultimately, budgeting is about how you plan to spend or save the money that you have.

You have money.  Ultimately, budgeting is about how you spend or save the money that you have.
Budgeting how money will be spent or saved

You will have heard some of the tips before. There are some ideas you wouldn’t normally expect to see as a budgeting tip. I know this because I have been told I see things different and have a different way of doing things. I can’t for the life of me figure out a Rubik’s cube. However, I love working with numbers and have been able to work out what does and doesn’t work when it comes to creating a budget and sticking to it. Where there’s a will there’s a way.

All of these budgeting tips can be put into motion when doing a long-term budget. Here is a link to information about long-term budgeting.https://moneymeasuresinc.com/category/manage-fluctuating-income-and-expenses/

Budgeting tip #1: Have goals that are meaningful to you

You will have heard this before, but it’s important so it can’t be left unsaid. There’s no incentive to stick to a budget if the goals lack meaning and purpose. Having goals that are meaningful is one of the principles for creating a SMART budget. https://moneymeasuresinc.com/create-a-smart-budget/

Do you have a bucket list of things you want to do in life? If you do, don’t forget to factor the things on your bucket list into your budget. Travel costs money. A hot air balloon ride takes money. Pursuing a hobby may involve going back to school. You may have no immediate plans to do something on your bucket list, but it can still be on your budget wish list.

Items on the bucket list, such as travel, should be included in a budget or be on the budget wish list.
Travel destinations that are on the bucket list

If your biggest reason for doing a budget is to get a down payment together for buying a car or a home, the goal of buying a car or a home will keep you motivated. However, if your main reason for doing a budget is to pay down debt, it may take more than an image of your happy dance to keep you motivated. Think of a few things that are low-cost that you can do to celebrate milestones as you pay down debt. Paying down debt can feel like work and you know what they say about all work and no play.

I am a visual person. If you are a visual person, give yourself a visual reminder of the goals you are working toward. Are you saving for a house and are having money transferred into a savings account each time you get paid? Have a house emoji pop up on your phone on pay day. It will remind you that you are making progress toward your goal of homeownership.

Budgeting tip #2: Listen to the voice in your head

When there’s something I can’t get out of doing, I want to get it done as fast and as painlessly as possible.

I’m not against reviewing credit card and bank statements to see where you’re spending your money. However, I do believe reviewing statements should be one of the last steps to take as part of the budgeting process. Otherwise, if the thought of reviewing statements is stressful, you may wonder if the time spent is worth it. Listening to the voice in your head can give you the information you’re after faster and can be more productive.

If the voice in your head says you shouldn’t be doing something every day, every week or every month, you may already know your Achilles’ heel. Do you buy on impulse? Do you push the panic button when you see a sale on something you need or want? When you know your Achilles’ heal when it comes to spending, create a budget that removes or reduces spending in the area that’s the problem.

Maybe the voice in your head says you can’t go window shopping without caving in and buying something. If this is the case, a way to stick to your budget is to do less window shopping. I don’t know about you, but I can’t have children with me and succeed at doing window shopping only. When kids are young, it would be cheaper to pay a babysitter.

Budgeting tip:  Beware the sale signs.
Sale signs

After thinking about your triggers, that’s the time to pull out credit card and bank statements. Review the statements with your triggers in mind to see if there is a clear link between the triggers and spending.

“the untethered soul – the journey beyond yourself” is proving to be an interesting read. It talks about the voice inside your head. https://untetheredsoul.com/

Budgeting tip #3: Be in a positive frame of mind when you create a budget

A bad time to create a budget is when the voice in your head is screaming, “Noooooooo!” No to numbers and calculators. No to picking apart past spending and finding ways to spend less.

A good time to create a budget is when the voice in your head is screaming, “Yessssss! Yes, I’ve got this!” Yes to making changes that will help you achieve the goals that mean something to you.

Budgeting tip:  Have a positive attitude when creating a budget
Have a positive attitude when creating a budget

The motivation to create a budget and stick to it needs to come from within. It’s not like a marathon where people will be there to encourage you to take those last steps to cross the finish line. That’s why it’s important to have goals that are meaningful to you and to celebrate milestones. It will be your motivation to stick to the budget.

Positive self talk is important. Think about a goal you achieved because you had a budget and stuck to it. It will be a reminder that doing a budget isn’t a waste of time and energy.

Picture what life will look like when goals are achieved. If the goal is to get bills paid up and debt paid down, what will life look like when the bills are paid up and debt is manageable? For people who are in debt, getting bills paid up and getting debt under control will mean having a better credit score, which will open doors that were once closed such as passing the mortgage stress test and being able to purchase a home.

Budgeting tip #4: Build in the “oops factor”

It’s not just about the $100 debit purchase that makes your automatic minimum $50 credit card payment bounce the next day. It’s also about the $50 NSF charge by the bank and whatever the credit card company charges for the payment bouncing and not honoring the minimum payment on the due date. Not to mention the time spent on the phone working everything out with the bank and the credit card company. Two common reasons for an “oops” happening are:

  • Not knowing the timing and amounts of all the automatic payments that come out of your bank account relative to the reconciled bank balance.
  • Counting your chickens before they are hatched when it comes to income.
Budgeting tip: Build the "oops" factor into the budget
Prevent an “oops”

I am fully in favor of having an emergency fund. I’m also in favor of building the “oops factor” into the budget.

Ultimately, an “oops” means there’s a cash crunch. Long-term budgeting done the Money Measures way makes it possible to foresee and manage a potential cash crunch.

Final thoughts on Budgeting Tips

When I went golfing with a friend, she told me to relax when taking a swing because being relaxed gets the best results. It’s the same with budgeting. If you’re stressed about budgeting, it will be a barrier to creating a budget that you feel good about and want to stick to. Create the budget and then stay on course by keeping your eyes on the prize.

People have different reasons for creating a budget:

  • To save money, whether it’s for a car, house, retirement or emergency fund.
  • Not wanting to overspend because overspending means accumulating debt.
  • Something unexpected happens which compromises personal finances.
  • Wanting to be proactive in managing money.
  • To have money for the things that have meaning.

Whatever your reason for creating a budget, there are budgeting tips here for creating a budget you will want to stick to. We offer free instruction on how to use the Money Measures cloud-based app to create a budget that factors in your goals. https://moneymeasuresinc.com/wp-content/uploads/2022/02/Money-Measures-Inc-Products-and-Services-1.pdf

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