Budgeting is the most important thing you have to do to get your financial crap together. If you don’t have a plan for your money, it’s hard to get anywhere with your financial goals.
I wish we would have had some budget tips for beginners because for years I tried budgeting, but it never worked. Finally, after going through Financial Peace University we were equipped with the tools we needed.
It took a couple months for us to get into our budgeting groove. But, it’s all gravy now.
So, I put together a list of budget tips for beginners that will help you to be successful with your budgeting.
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1. Combine your finances
First things first, you have to combine your finances with your significant other.
Budgeting will not work if you have your money separated from each other. That’s like saying you don’t trust each other with money.
It also keeps you accountable and on the same path toward reaching your financial goals together.
So, open a joint checking account where your paycheck will go first before it goes anywhere else.
2. Budget together
You can’t budget successfully if your significant other is not on board.
Sit down and do the budget together. This way you both know the whole picture of your financial situation, and there are no arguments about spending.
3. Set a realistic budget
We’ve established that a budget is the key to unlock financial freedom. But, a budget won’t work if it’s not realistic.
If your budget is unrealistic, you won’t be able to stick to it. So, even if you have to set the budget categories a little higher, you can always adjust it them the next month.
It’s always better to come in under budget than over budget.
4. Set a date
This is a simple yet necessary step. Set a date to go over your budget every month and then stick to it.
Make it a mandatory appointment.
My husband and I pick the same date every month, so it has become routine for us. We know exactly when our budget meeting takes place, and we come prepared to discuss our finances.
5. Make cuts
If you’re living with debt, making budget cuts can really help you pay off your debt quicker. This works for saving as well.
It may be hard to make some of the necessary cuts at first, but you’ll quickly get over it once you see how much you’re saving every month.
Some cuts you can make are…
- Stop eating out and cook at home.
- Cancel cable and go with a free or cheaper alternative.
- Cancel your gym membership and work out at home.
Look at your budget, and see where you can make cuts to free up that extra money to put toward debt or savings.
6. Set goals
Part of making a plan for your money is setting goals for it.
Think about the short and long-term goals you want to set. Make sure you have a realistic timeline for achieving them as well because, as Robert Herjavec says, “A goal without a timeline is just a dream.”
After you have your plan and timeline, work backward.
Break your goals up into yearly, monthly, weekly, and maybe even daily micro-goals. These micro-goals help to keep you on track and motivated.
Make sure to discuss your goals at your monthly budget meeting. This way, you know how close you are to reaching them and adjust timelines if needed.
Goals are essential for your life and financial future, but dreaming is equally important (in my opinion).
During your budget meeting, talk about what you would like to see, have, and do when you are where you want to be with your finances.
For us, dreams are future goals that haven’t been mapped out yet.
Thinking about the endless possibilities that are available when money isn’t a concern is really motivating.
8. Miscellaneous Category
Make a miscellaneous category in your budget to catch those overbudget items or forgotten expenses.
A cushion can keep you from going over budget.
So, decide on a monthly amount to dedicate to your miscellaneous category. And if you don’t use it, transfer it to savings or put it toward paying off debt.
9. Budget for annual expenses
As the year goes by, make a list of yearly costs to keep in your budgeting notebook or planner.
Having a list of annual expenses on hand is convenient when doing your monthly budgets.
10. Know your income and fixed expenses
Knowing your income and fixed expenses like your mortgage and any other bills that are the same each month really speeds up the budgeting process.
I like to use the previous month’s budget for the upcoming budget. This allows me to automatically transfer the fixed expenses and income to the new budget without looking them up (which saves a fair amount of time too).
11. Keep Going
Budgeting can take some getting used to. You’re going to make mistakes and probably go over budget. But give it a couple months, and you’ll be budgeting like a pro.
Just stick with it.
DON’T GIVE UP!
Starting a budget can be life-changing…if you do have the know-how to implement it.
Setting financial goals and dreaming will keep you motivated, and creating a realistic budget will help you stick to it. Before you know it, you’ll be budgeting like a pro in no time when you implement these budget tips for beginners.
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