Did you know that two-thirds of Americans would have a hard time coming up with $1000 in the event of an emergency?
Yikes! When you’re working so hard to provide for yourself and your family, that’s the last situation you want to find yourself in.
So how can you avoid this type of circumstance happening to you?
The answer: budgeting. Let’s take at 8 budgeting tips to keep you on top of your financial game.
Check out for more on personal finance tips.
1. Establish Your Priorities
One of the first budgeting tips for beginners is that you need to determine what is most important to you. Some things like housing and food are fairly obvious. After the necessities, though, it becomes a matter of you and your family’s personal interests and desires.
Is it important to you to pay off your mortgage, go on a dream vacation, or put your kids through college? These are the types of questions you want to be asking and answering. You need to know where you’re trying to go, otherwise it will be difficult to get there.
2. Set Up a Regular Budget Meeting
If you’re in a relationship and you and your partner have shared finances, you’ll want to set up a regular budget meeting. This is one of the essential budgeting tips for families.
At your first meeting, you’ll want to plot out the priorities you each have individually and the ones you share together. In order to be successful, it’s vital that you’re both on the same page.
You’ll want to have a budgeting meeting once a month to check-in and deal with unexpected expenses, new information, or any circumstances that have changed. Nothing is set in stone, so priorities can change over time. It’s good to be attentive to this and remain communicative about finances.
3. Focus On the Money You Have Now
It can be tempting to try and project future income or look through your past spending history. When you put too much focus in the past or in the future, you take away from the power you have in to present to affect your financial situation through budgeting.
Only work with the money you have right now. You can deal with hypothetical future money if and when it becomes realized someday.
4. Set Aside Money For Immediate Obligations
33% of Americans say they don’t budget their money at all. Without a budget, it can be difficult to cover basic expenses, pay off debts, or start building savings.
The first things you’ll want to put money towards when budgeting are your immediate obligations. Things like rent, groceries, utilities, gas, and minimum payments on any debt will have to be dealt with first.
Each month, you’ll be assigning roles to each of your dollars. These most critical categories are where your money should go first. It’s amazing how even this first step in budgeting can make you feel much less stressed because you understand how the basics will be taken care of.
5. Be Prepared For Surprise Expenses
There are always situations that can come up that include expenses you didn’t plan for. This is where it’s tempting to grab your credit card since it wasn’t built into your plan.
Instead of racking up more debt for non-monthly expenses, you didn’t anticipate, build these into your budget. For some expenses like your car registration, you know that this non-monthly expense will pop up once a year. If it’s going to cost $200, this means you can budget $25 each month so that the money is there when you need it.
For other things, like a surprise car repair, you’ll simply have to make an educated guess as to how much you should expect to spend each year in this type of way. Having something saved for these types of circumstances is better than nothing, even if it falls a little short.
6. Build a Debt Plan
Having debt can feel crippling, like a pile you’ll never dig yourself out from under. In order to overcome this, you’ll want to come up with a plan.
Take the debt that has the lowest balance and budget so that you can pay more than the minimum balance each month. For the rest, just pay the minimum balance. When that debt with the lowest balance is gone, start on the next lowest debt.
Over time, you can get to a place where you’re debt-free!
7. Allow Some Room For Fun
It can be easy to be somewhat puritanical when aking a budget. Don’t forget to leave yourself a little wiggle room to add to the quality of life. Budgeting is a marathon, not a sprint, so give yourself some breathing room and budget for some fun stuff every month.
8. Track Your Spending
Now that you have a budget, you’ll want to track where every single one of your dollars goes. When it’s time to purchase something, you should always be checking in with your monthly budget. Even if you have plenty of money in your checking account, you should stick to your allotted budget for each category every month.
Use These Budgeting Tips and Watch Your Savings Grow
Through using these budgeting tips, you will start to experience the calm of being in control of your finances. A lot of people even say that once they start budgeting it feels like they’ve been given a raise! Having a budget, paying down your debt, and building your savings account can give you peace of mind that you didn’t even think was possible.
If you’re looking for more financial tips so that you can live your best life, check out this article on how much savings you need to retire.