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Have you ever found it hard to stick to a budget? You’re not alone. Over 8000 people search the internet for budgeting tips every single month!
Struggling to stick to a budget doesn’t mean you’re bad at budgeting. It just means you haven’t found the best way to make your budget work for you yet.
It might take a few goes and a bit of trial and error to find the budgeting method that suits you (and there are quite a few).
However, while it might be tricky to get going, budgeting doesn’t have to be complicated and once you’ve been doing it for a while, it becomes second nature.
Here are nine easy to implement budgeting tips for beginners:
1. Set Some Budget Goals
First set out your goals. Think about the things you want to achieve and lay them out. This will help keep you motivated to keep on track.
These could be things like:
- Building a healthy emergency fund
- Saving enough for a holiday
- Paying off a specific debt
Budgeting well is what’s going to help you achieve those goals sooner.
2. Check Your Spending Habits
The best way to get an idea of where you may be overspending and where your money is going is to record your spending by using a spending tracker.
Be completely honest with yourself and keep a record of everything you spend for a week or longer. This will give you a concise overview of exactly where your money is being spent. It can also give you an insight to whether you not you tend towards emotional spending.
Take a look at the results and consider if you are happy with your spending or is there anywhere you think your money would be better off going towards one of your goals?
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3. Prioritise Needs Over Wants
When you’re working out your budget, separate your needs from your wants. Your monthly water bill is a need. Your cable subscription is a want.
Replacement clothes when yours have holes in – need. A new pair of sandals because they look cute – want. You absolutely can budget for both, but when it comes to budgeting, the essentials have to come first.
4. Budget for Saving
Another great budgeting tip is to make saving a part of your budget, so it just goes out like any other bill. Budgeting for saving, even if it’s just a small amount, makes you much more likely to build better savings than just getting to the end of the month and hoping there’s something left to save.
People often call this method ‘paying yourself first’.
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5. Try using cash instead of card (Cash Envelope Budgeting System)
Using cash instead of card where possible (for example grocery shopping, food shopping, coffees out etc) makes spending feel a lot more tangible.
Physically handing over your money helps you really think about your spending in a different way to simply waving your card in front of a machine.
The cash envelope system (advocated by Dave Ramsey) can be a great way to help stop overspending. Setting aside bills that come out of your bank electronically and automatically, think of other items in your budget that could be paid for in cash.
These could include:
- Food shopping
- Clothes shopping
- Eating out
- Nights out
This list wont necessarily be the same for everyone, but take a look at your own budget and see which areas might work.
Then, once you’ve established the amount you’ve budgeted for each category, each month take that amount and place it in an envelope and label it.
For example, perhaps you find yourself overspending on coffee while out and about. You may decide on a ‘coffee’ budget of £25 a month. So at the beginning of the month you’d place £25 in an envelope with ‘Coffee’ written on it. It’s that simple.
Every time you spend money on coffee during the month, the money must come from your coffee envelope. Any change goes back in the envelope.
Once that money is gone, no more coffee. It might sound like a harsh way of budgeting, but it’s a really effective way to keep control of your spending. And remember, you’re keeping to the amount you budgeted was right for you – and working towards the goals you set.
If you have cash left over in any of your envelopes at the end of the month you can choose to roll it over into the next month or add to savings.
6. Budget For ‘Extras’
Make room in your budget to allow for those little things that crop up unexpectedly, or that you might forget. The present you have to buy when your kid gets invited to a birthday party, or the contribution you have to make to a colleagues’ leaving collection.
Having a miscellaneous section in your budget to allow for these kind of things can help with not getting caught without money in the budget to cover them.
7. Be Flexible
Don’t think that once you’ve worked out a budget it’s set in stone and you can never change it. You can always be flexible.
Whilst most expenses will probably stay consistent over the year, like utility bills, some expenses may vary from season to season, so your budget may need to adapt to any changes.
For example, if you have children, the school summer holidays may prove to be a more expensive time of year as you have more family outings, or you may find you need extra in your budget around Christmas time for travelling or gift giving.
These don’t have to mess up your budget, you may just have to go through and make a few adjustments. You can always try and cut back in one area to make more money for another.
8. Don’t Forget To Treat Yourself
Don’t budget so harshly that there’s nothing left for fun. For most people, money and our relationship with it can have a strong impact on mental health, and having absolutely no money for anything enjoyable is not going to lead to a good relationship with your budget!
If things are very tight this may mean having to cut back slightly in another area or even pay slightly lower debt repayments, but in the long run, the repayments of being happy to stick to your budget and keeping to it long term will pay off considerably more.
An unhappy budgeter with no room in the budget for fun is more likely to routinely overspend and end up feeling guilty.
If things are really tight, you might consider finding a way to make some extra money to add to your budget.
9. Be Content
Finally, be content with your own budget and make it right for you. It’s so easy to compare yourself to other people and see how much they seem to have to spend on certain things that you don’t, or think that you need to be doing the same kind of things.
Try not to do that. Your budget has to work for you and your financial situation: what works for someone else won’t necessarily work for you and vice versa.
It takes time to get used to living on a budget, and you may need to adjust things as you go along until you find what works. Go easy on yourself, find things that work to keep you motivated, like little treats or rewards and keeping your bigger goals in mind. You’ve got this.