Personal budgeting can be difficult, but it doesn’t have to be impossible. With a bit of discipline and a few basic tips, you can make an aggravating task pain free – and most importantly, effective.
1. Figure out how you are spending money.
The first step to pain free personal budgeting is to figure out how you are spending the money you have now. If you’ve ever found yourself saying, “I bring home $4,000 per month. Where does it all go?” then chances are you’re spending it spontaneously. Keep track of all of your receipts for a month, and keep a ledger of where all your money goes. You’ll be surprised how much is spent on things like fast food and snacks. Find the areas in your life where you can cut back on spending, and see the money come back to you in droves.
2. Don’t be too rigid with your budget.
It’s important to build a personal budget and stick to it. However, if you make it too tight, you’ll find yourself worrying more about money than anything else. This is the quickest way to burn out and give up budgeting, as that kind of stress and worry can easily make you depressed. Leave a bit of leeway in your budget for those “gotta have it now” finds. That way, you can stay on budget and not feel guilty when you purchase something on a whim.
3. Figure out your financial goals.
Why are you budgeting? What do you want to save money for? It’s important for you to figure out where you want to be financially in ten years or so, and what you have to do to get there. This gives your budget a goal, and prevents it from becoming a faceless, pointless exercise that isn’t much fun. If you have an objective to work towards, you are much more likely to stay on budget.
4. Keep a well balanced checkbook.
This includes purchases made with debit cards, as well. Find computer checks online and keep track of them, in addition to all of your usual spending. By staying on top of transactions that might not have processed yet, you can avoid surprise overdrafts that might have slipped by unnoticed until it was too late.
Personal budgeting doesn’t have to be difficult, and with the financial peace of mind it brings, it is well worth the effort it takes.