Tips to Get Your Budget Back on Track
The holidays are officially over and it’s time to make good on your New Year’s resolutions. For a lot of us, that means cutting back and setting financial goals for the new year. That’s why we put together this budgeting guide—to help you get in the right mindset and find a plan that you can actually stick with.
Before you make your budget, you need to eliminate unnecessary spending. Paying too much in cable? Try amending your cable plan or cutting cable altogether. Have a subscription that you don’t use? Get rid of it. Stopped going to the gym months ago? Be real with yourself. If you’re not going to go, then cancel your membership.
Determine why you are budgeting. Are you trying to get yourself out of debt? Are you saving for college tuition or a down payment on your home? Or maybe you just want to take control of your spending habits. Whatever the reason, identify it. Having a reason or goal in mind can help you stick to your budget better.
Think of it as a spending plan. I’ll say it again…no one likes being on a budget. It reminds us of canned soup for dinner and weekends spent coupon clipping. But a spending plan puts you in control of how you use your money.
Prioritize. Your first priority will always be necessary costs like housing, utilities, food and transportation. Prioritize your financial goals as well, such as paying off debt or saving for a downpayment or retirement. Finally, understand the difference between needs and wants. The point of a budget is to manage your money wisely and create a plan that makes you happy. So, once you’ve budgeted for your bills and savings plan, make room in your budget for what makes you happy and enhances your life.
Get organized. Set up reoccurring payments on auto-draft. If your employer allows, split your direct deposit so that a portion of your paycheck automatically goes into your savings account. Plan your grocery shopping for the same day each week so you know when and how much you are spending. Plan ahead for holidays or events like birthdays, where you know you'll be spending a little extra.
Research different budgeting styles. Budgets are like diets: there's a million of them out there and you need to find one that works best for you. It's all about researching different budgets and finding what works best with your lifestyle. For some people that means using cash instead of cards. For others, it's the 50/30/20 plan, where you spend 50 percent of your income on necessities, 30 percent on wants, and 20 percent on savings or debt repayment.
Budget together. Every member of the household should be involved in the budget planning to make sure you’re on the same page. If the budgeting impacts your children, make sure you have a conversation with them and let them know what changes you’re making, and why.
Plan for large expenses. If you’re saving for large items such as a new dishwasher, computer, or trip to the Caribbean, be sure to budget for those specific expenses. The same goes for the holidays, back to school shopping and other times of the year when expenses add up.
Don’t forget to focus on the little things. A $3 pack of gum here, a festive pair of socks there, plus a few craft cocktails on the weekend—it all adds up. This money could be spent on items that you really need, like a replacement for your shoes that are falling apart. Or just on items that you really want that will end up making you happier than all those little items combined.
< Go Back