Unfortunately, the word “budget” gets a bad rap. In the end, a budget is simply a plan for your money. budget It means that you are spending in a targeted way before the beginning of the month. Unfortunately, many people see the budget as a limitation that prevents them from doing what they want.
But this is far from the case! A budget doesn’t limit your freedom – it gives you freedom! It really is about being intentional about where your money goes.
How can budget help me?
Ready to start? Here are our top 8 budgeting tips!
1. Make your budget from scratch before the start of the month
This means that before the month begins, you make a plan and name every euro. This is called a zero budget. This does not mean that you have zero euros in your bank account. This simply means that your income minus all your expenses equals zero.
2. Make a budget together
If you are married, sit down once a month and enjoy a family budget. Make it fun! Get your favorite snacks and put together a good playlist to help you focus.
You need to be on the same page when it comes to money, so put goals together and dream about what the future will be like. Remember: if you are one, your bank accounts should be one too! It’s no longer your money or mine, it’s our money.
And if you are single, find someone who can hold you accountable and help you achieve your goals!
3. Remember that every month is different
Some months you’ll need to budget for things like school supplies or routine car maintenance. The other months you’ll save for things like holidays, birthdays, and parties. Whatever the occasion, be sure to budget for these expenses.
Remember to adjust your budget each month as the situation changes. Create an insurance fund Where you can invest money throughout the year. If you don’t have a plan, you will get stressed. This takes all the fun out of giving and celebrating. Nobody wants that!
4. Create a buffer in your budget
Set aside a small amount of money for unexpected expenses during the month. Include it in the “Miscellaneous” category of your budget. So, should the unexpected happen, you can cover it without having to withdraw the money you’ve already invested elsewhere. Keep track of expenses that most frequently fall into this category. One day, you may want to give them a permanent place in your budget.
5. Pay off your debts
If you have debts, paying them off should be your top priority. Uses Snowball method To get rid of your debts as soon as possible. Attack her! get mad at her! Don’t let debt rob you of what allows you to Earn money : your income.
6. Don’t be afraid to cut your budget
hang on! It might be time to make some budget cuts in your life. If things are tight right now, you can Save money quickly By canceling your cable, eating less, and buying discount clothes and groceries. Remember that budget cuts are only temporary. You can always make edits later.
7. Set a schedule (and stick to it)
While you’re working on budgeting into your monthly routine, why not set specific dates for other expenses? You can set up direct debit from your checking account to pay your bills. Or you can shop on a specific day each week or twice a month. When you know what to expect and when to expect it, you are Eliminate a lot of stress and potential problems.
8. Track your progress
It is important to check your progress from time to time. If you are married, get together and talk about your goals. Otherwise, find someone to check in with. Explain how balancing helps you move forward. Think about how you can reduce your expenses or maybe even Earn additional income to achieve these goals faster. And don’t forget to celebrate the small victories.
How to set a budget – in 5 steps
Let’s see how to budget in just five steps.
Budgeting Step One: State your income
Start by listing the money you expect to get during this month: regular wages (both yours and your spouse’s) and anything extra you can earn from a garage sale, independent function or a parallel activity.
Budgeting Step Two: Make a list of your expenses
Then list your expenses, starting with the “four walls”. (These are food, and utilities, and housing, and transportation). Next, make a list of all your other monthly expenses. These are debts, insurance, savings, hobbies and personal expenses.
Budgeting step three: Subtract your expenses from your income
This is where the zero budget that I talked about above comes in. But what if you make this calculation and have money left over?
Don’t just drop it, or you’ll spend it here and there without even thinking about it! Try it out by customizing it to the show you’re watching!
What if you get a negative number? everything is going to be OK. But you will have to cut the extras or accept additional work to cover them. Just be warned that doing extra work never means wasting that money. Put it to work for your budget!
Budgeting Step Four: Track Your Transactions
Can I let you in on a little secret? The way you will really earn with your budget is by keeping track of your transactions. This means that you budget for every account and every income in your budget over the course of the month.
This helps you stay accountable to yourself, your spouse (if married), and your finances! You don’t hide your expenses from anyone. And you won’t overspend because you’ll know what’s left in each budget line.
Budget Step 5: Create a new budget before the start of the month
I know I’ve mentioned this before, but I’m repeating it here because this is the last step in your budgeting process.
Which is worth repeating, honestly, because it’s so important. This is when you prepare for whatever lies ahead of you in the month ahead, ladies and gentlemen. Create a new budget each month.
Budget advice for irregular income
good news. You can budget with irregular or uncertain income. A good rule of thumb is to set your budget based on what your low income month will look like to you. This will be your budgeted income.
Here’s how it works:
- Make a list of things that you might put into your budget. Include things like giving, saving, four walls, etc.
- Prioritize your list. Ask yourself, “If we had a terrible month and only had enough money to do one thing on this list, what would it be?” Put a 1 next to that thing.
- Pregnancy. Put a 2 next to your second priority and continue with your budget, marking items in order of importance. Remember that necessities always come first.
Not only will this method allow you to make your budget work for you, but it will also allow you to see exactly where your money is going.
How do you quickly budget?
If you’re still in debt and haven’t created an emergency fund yet, you’re on the first step. This means that your goal at this point in your financial journey is to save, save, and save!
When you realize that the purpose of budgeting is not to restrict your freedom but to give you freedom, you will be well on your way to the love of your life and your bank account! This is called winning money.