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Budgeting can seem daunting and is often a word savers hate to hear, but if you do it right, budgeting can really help you avoid any financial hardship.

Therefore, if you are trying to create a budget, follow our Top 10 Tips to make budgeting easier:

 

Key Points:

 

  • In 2021, around 80% of Americans reported using a budget to help them improve their finances.
  • Using budgeting apps such as Mint and Honeydue allow you to categorize your spending, and spot where you can make changes and savings.
  • You could create a manual budget by creating an incoming and outgoings spreadsheet, ensuring that you plan your spending accordingly.
  • Canceling unused subscriptions such as for streaming websites can save you money on a monthly basis.
  • Try and use low or no interest credit cards to prevent spending money on interest repayments.

 

1. Have Goals In Mind

 

Whether you are trying to pay off a loan, debt, or merely need to create a reserve of savings for retirement or a rainy day, it is important to remember your goals – it will motivate you to keep going.

Of course, knowing what you are budgeting for creates quantifiable goals as well as motivational ones, as it provides a target of how much you need to save.

 

2. Use a Budgeting App

 

Budgeting applications can be downloaded to your smartphone or tablet and assist you in measuring and controlling your spending and saving. These apps can be connected to your credit cards, debit cards, and bank accounts to track your spending and help you recognise where you can make changes.

Many of these apps allow you to set up standing orders to your savings accounts, ensuring that you are automatically saving without having to constantly remind yourself.

 

online budgeting

Budgeting apps are an easy way to control your spending and grow your savings

 

3. Budget in Advance

 

Budgeting takes planning, and is sustainable if you plan ahead and account from your expenditure. If, for example, you are budgeting on a month-by-month basis, it is important to think about December in November.

By thinking ahead, you can pre-empt the purpose of your income. For instance, if you have a monthly wage of $3,500, you should think ahead and consider what proportion of that will go towards paying debts, daily living costs, and how much you will contribute to your savings.

 

4. Remember, Monthly Spending Can Vary!

 

This is why planning ahead is so important. If you have family birthdays concentrated in the winter, your outgoings in the winter months will naturally spike. By circling these dates on your calendar well in advance, you can spread your spending across the preceding months, and not panic when birthdays and holidays roll around.

You could even create an additional savings account – one for spending on gifts, in addition to one intended to pay off living costs and debts.

 

5. Prioritise Your Payments

 

You should think carefully about which costs or debts you should pay off first. Debts which could compromise your living standards – namely food and electricity – should be near the top of your priority list.

Similarly, contracts which declare your assets as collateral are particularly deserving of your attention.

6. Be Prepared To Cut Back!

 

Sometimes financial difficulties can come about. In these instances, you may have to make some undesirable changes – but they’re often temporary.

Canceling subscriptions to music platforms and magazines can provide a source of financial respite, as can shopping at thrift stores, and making fewer impulse purchases.

 

7. Leave Yourself Some Wiggle Room

 

You are unlikely to stick exactly to your budget, and that’s okay. But, for this to be sustainable, it may be sensible to keep a reserve for treating yourself by cornering off a small section of your income for ‘miscellaneous’ spending.

Sometimes prices rise unexpectedly, and it’s important to preempt that you may spend more than you ideally want to.

 

8. Be Careful When Signing Up To Services

 

Subscription services – whether for streaming movies, listening to music, or a monthly delivery – can be accompanied by lots of small print. Before committing yourself to these, make sure you are familiar with what the costs actually entail, and how to cancel your subscriptions.

 

music

Be sure to be aware of T&Cs and hidden costs associated with subscription services

 

9. Don’t Be Afraid To Seek Help!

 

Budgeting can be challenging, and you’re not the first person to feel that. Friends and family and professionals could provide useful insight.

Speaking to a financial adviser is always an option if you can’t quite get a hold of your budget.

10. Go Easy On Yourself!

 

Budgets take time to perfect, and it is normal to find yourself stressed by the financial pressures of life. When that happens, take a step back and remind yourself of our first tip – why you are budgeting in the first place, and rest assured that there are lots of ways you can steady yourself.

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