Getting organized enough to put together a budget that works for you is no mean feat. There are so many moving parts that play into your budget that it can easily be overwhelming to stay on top of your finances. However, spending a few hours getting all your ducks in a row can make your life much less stressful. If you are looking for a few tips that will help you create a budget and stick to it, keep reading.
Look Through Your Bank Statements
To best track your expenses, print out a few month’s worth of your bank statements that you can comb through. From there, you can highlight payments with different colors based on categories. For example, groceries and gas will be put into one category, mortgage payments or rent, plus utilities in another and miscellaneous spending, like buying new nike baseball gloves, could make for another grouping. You will then add all these numbers to get an accurate amount of what you are spending each month and compare it to your income. Not only will this help to start understanding your finances, but it can also help you figure where you need to cut spending, if necessary.
Make Room for Savings
Once you can see how much you swipe your card each month, come up with a few ways you can save money to put away for use at a later time. Having a savings account can give you peace of mind knowing that you can cover any unexpected bills, which like to sneak up at the worst time. Whether you can set aside a few dollars a week or two hundred, you will thank yourself later. Saving money is a great habit to build, and there are plenty of savings accounts that can yield money each year. You may be surprised how much of a cushion you can save if you put your mind to it and cut unnecessary spending. If you want to be the most efficient in your efforts, consider making an appointment with a financial planning specialist at your bank.
Stay Organized
Staying organized by having a budgeting notebook is the best way to stick to your budget. Give an allotted amount to each of the categories (which are entirely customizable to your situation) mentioned above and jot down all the due dates for your payments. You are much more likely to stay within your budget by tracking your expenses as you go. At the end of the week, take a few moments to recalculate your budget based on that week’s spending. Depending on how long you have been a free spender, it may take a few months to come up with the plan that works best for you. It is important to remember that budgeting looks different for everyone.
Remember the Consequences of Overspending
While there may be plenty of times that extenuating circumstances cause some months to be tighter financially than others, try to remember that stress before overspending on things you may not need. There is nothing worse than not knowing how you will make your car payment or feed your family. Being a successful budgeter is about learning self-control and understanding the difference between a want and a need. All of these things take time but will be worth your while once you have your finances on track.
Allow Yourself to Splurge
Budgeting isn’t necessarily about cutting your spending as much as it is about spending intuitively. You can splurge on a new outfit or a nice trip, but do it during a time where your budget allows it. Play it safe in the beginning, and plan out when you want to make a large purchase. You will be more comfortable the longer you do it because your spending will eventually become very routine. Everyone deserves a special treat every now and again as long as it is thought out.
Making a budget may seem overwhelming even after doing some research. The best thing you can do for your financial situation is to take the plunge into getting it under control. It will not be an easy process, but you will be putting yourself in a great place to be financially stable in the future. It is undoubtedly more fun to spend money than save and categorize it, but it is a nice feeling going to sleep at night knowing you have things in order. The tips above are a great way to get started, and they may inspire a few ideas that you think may work for you.
