Smart Budgeting

Introduction

When you’re on a budget, it can be tough to know where to start. It’s important to remember that the people who have learned how to effectively budget don’t just cut everything out of their lives, they’ve learned how to plan for and manage the expenses that are most important to them. Let’s go over some basics so we can make sure you’re ready for your next pay check.

Plan your monthly expenses to make sure you’re ready for everything.

• Understand your monthly income.
• Understand your monthly expenses.
• Set a budget and make sure you can afford it.
• Make sure that you can pay for all of your monthly expenses before the month begins (or at least set aside the funds)

Look at your financial obligations first, then plan how to spend the rest.

The first step to budgeting is knowing what you can afford. You need to plan for the things that are going to come up, whether it’s a big expense or something as routine as car insurance. If you’re not sure how much money you have available, start by making a list of all of your financial obligations—like rent and utilities—and figuring out how much those will cost over time. Once you know those numbers, it’s time to figure out how much money will be left over for other expenses and wants.

Once you’ve done all this planning and math, there are still two more things left: emergencies and savings. Before any expenditures arise that cannot be avoided (such as medical bills), set aside some cash so that there will be enough in case anything unexpected comes up later on down the road. And finally, make sure that whatever extra money doesn’t get spent each month goes into savings!

Create a pay-day splurge for yourself.

When budgeting, it’s important to give yourself some wiggle room. One of the best ways to do this is by setting aside an amount of money each month that you can spend on something fun or frivolous. This can be anything from buying a new pair of shoes, visiting an adult coloring book class (because who doesn’t need more stress relief?), or getting your nails done.

This is one of the few splurges that I recommend as a “need,” as opposed to just being something nice to have and enjoy in moderation. The reason is because it relieves stress and can help you feel more relaxed when it comes time to go back into your normal routine after spending time doing something fun and enjoyable.

Focus on the things you value.

To keep yourself on track, it’s important to stay focused on what you value. If you’re spending a lot of money on coffee but could use the money for something else, that’s a sign that maybe your spending habits aren’t in line with your values.

If you have trouble sticking with this kind of budgeting, try imagining the future version of yourself who has already achieved financial success and see if it helps you get motivated.

Include unexpected expenses.

• Include unexpected expenses. If you know that you want to travel in the next year, for instance, include an amount for it in your budget so that you’re not blindsided when the time comes to book. It can also be helpful to set aside savings for one-off costs like car repairs or home renovations as well as more predictable recurring expenses such as insurance premiums and utility bills.
• Think about your habits and goals. Consider how much money you spend on food each month and whether there are ways that could be reduced without impacting your health or happiness (for example, by cooking more at home). Also think about whether there are areas of spending where it would make sense to cut back—such as eating out or taking expensive vacations—and consider if this would help meet a goal (like saving up for retirement).

Pick up a part time job or side hustle to make ends meet.

• Pick up a part time job or side hustle to make ends meet.
• Pick something that you enjoy and can build into your career down the road.
• You’ll be learning new skills, networking with others, earning money and spending time with friends and family.

You don’t have to cut out all of your “fun” spending.

Being smart about your spending doesn’t mean you have to cut out all of your “fun” spending. You can still have fun without spending a lot of money. There are many ways to have fun without spending a lot of money, and I’ll give you some examples below:

• Stay home and watch Netflix, Hulu or Amazon Prime
• Go for walks around the neighborhood or in the woods with friends
• Practice yoga or meditation (online courses are cheap!)

Remember that it’s okay to give yourself a break.

In the same way that it’s important not to be afraid to treat yourself, it’s also important not to feel guilty about spending money on yourself. It’s a part of life, and you deserve it.

The key is knowing when you’re being a little too hard on yourself or taking life too seriously; this can happen when we’re trying too hard or trying not to make any mistakes at all. Remember that it’s okay sometimes just to relax and enjoy yourself!

You can save money and still have fun while doing it.

You can save money and still have fun while doing it.

Being frugal doesn’t mean sacrificing all the things you enjoy in life. If you’re looking to cut back on your spending without having to give up everything that makes you happy, here are some tips for making smart budgeting decisions:

• Cut back on discretionary spending. Do you really need a new pair of shoes every month? Can you get by with just one night out with friends instead of two per week? Consider how much time or money is involved in your favorite hobbies, and see if there might be ways to do them cheaper or differently (like taking advantage of free events). This will help reduce your overall cost of living as well as make room for other things on this list!

Conclusion

Thanks for reading this post! I hope we were able to help you out with some tips on how to save money. There is one thing that is really important, though: don’t be too hard on yourself. The world can be tough enough without having a budget that’s entirely unrealistic! If you try these tips and they don’t work the first time around, give it another shot next month. Just remember to keep your goals realistic and have a plan before you start spending.

If you need help with organizing your finances please take a look at our amazingly helpful digital budget planner! Just be sure to have an excel reader when you download it. (YMF Monthly Budget Planner)