Budgeting is one of those great habits that we all acknowledge, but don’t always practice. The truth is that even basic budgeting will help you to save money and make informed spending decisions, on everything from buying groceries to browsing real estate. It may not be easy, but budgeting will give you more control over your finances and can help you to minimize and eliminate credit card debt. If you want to reap the benefits of knowing exactly how much money you spend, here are three tips for starting a monthly budget.
1. Remind yourself why you want to budget
Monthly budgeting isn’t complicated, but it does require sacrifices. Cutting down on takeout can be difficult to do without a long term objective. Figure out exactly why you want to budget, and use that as your motivation. Whether it be to pay off your student loans or finance your dream trip, having a goal to work towards will help you to be diligent in your budgeting efforts. You won’t do something, unless you want to do it.
2. Don’t set impossible goals
It is important to have goals for budgeting, but be reasonable, especially early on. Nothing is more discouraging than not meeting the goals we set for ourselves. This can act as a motivator, but often times after a goal is missed, we are much more likely to give up. If, for example, you want to cut down on your entertainment expenditure by 60%, try tackling the problem in small portions. This could mean reducing it by just 10% the first month, and than another 10% the next. Habits typically take 21 days to break, so take it slow! Remember; any progress, is still progress.
3. Use a simple budgeting tool
When it comes to budgeting, the simpler the better. For beginner budgeters and those who are doing only personal finances, a well laid-out spreadsheet is the ticket to a successful budget. Our free budgeting tool will have everything you need and incorporates incidental expenses, debt payments, fixed expenses, and savings. It also includes helpful tips, such as how much you should be spending on rent based on your income, so make sure to check it out! If you want to capitalize on the amount of money you earn and have more financial freedom, monthly budgets are the answer. Although starting a budget can be tough, having a clear long term goal, intertwined with shorter, realistic objectives can make the process rewarding and, believe it or not, fun. So get out there and start budgeting! If you need any help, (or have budgeting tips of your own) make sure to leave a comment below!
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