Hello, friends! I’m getting ready to host a webinar on budgeting in a couple of weeks. So I wanted to get some insight from the community: What are the budgeting tips that you live by? Is there any advice that helped you to stick to a budget?
The two best pieces of budgeting advice I’ve ever gotten are 1.- Plan for things to go wrong and 2.- Automate some savings, even if you can only afford a small amount.
The biggest budgeting mistake I made when I was younger was basing my budget around a single month where nothing went wrong. But then my car would break, or I’d need to go to the doctor, etc., etc. Obviously, these are things that happen from time to time. But if you’re not accounting for irregular expenses, you don’t have a realistic budget.
As for automating savings: There have been many times in my life when I’ve had very little left over after the bills were saved. When you can only stash away a few bucks here and there, saving money can seem hopeless. Still, I wish I’d gotten in the habit of paying myself first and automating some savings. Saving $20 out of each paycheck didn’t seem like it would get me anywhere. But at the end of the year, that’s still $500, which can be a lifesaver in an emergency.
I’d love to hear your best budgeting tips and advice! Also, what tools do you use? Apps? Spreadsheets? Plain old pen and paper?
I’m a big fan of save it before I see it. If I get a raise or money from a side gig, I’ll direct deposit or transfer that amount to my savings before I even receive the money. So my checking account balance is unchanged, and I kind of “forget” the extra money went to my savings. That way, I’m less tempted to spend the extra money.
Tracking my spending in Mint. Tracking on paper works just as good but its so handy to offload most of the work to the app. But tracking in and of itself is key – the awareness gained from just seeing where my money is going is where it all started for me and it’s still so powerful over a decade later.
Cash envelopes for variable expenses and sinking (saving) funds have been an absolute game changer for me and my budget.
Envelopes: I take cash out of every paycheck for my food (grocery AND eating out/snacks) budget. When that money is gone, I just don’t spend on food till next payday. So if I choose to eat out one night and then later don’t have what I need for dinner, I shop in my own cupboards. I also use cash envelopes for haircuts/beauty, my craft/hobby, and school lunch money.
Sinking Funds: For an expense that I know I will have in the future, like Christmas, I take out a certain amount every payday, and either move it to a savings account, or save it in cash in my safe. If I want to have $1000 for Christmas gifts and holiday expenses, I take our $40 from each paycheck during the year. That way I am not scrambling to cover for gifts, and I don’t go into debt. I also use sinking funds for vacation, back-to-school expenses for the kids, and car registration. When I first started, I was only able to save for holidays. I have been able to add more sinking funds once I was able to eliminate most of my debt. And it prevents me from going into more debt!
I use the Mint app, like @reach.your.goals! It was recommended by another community member a few months back. It’s good for seeing my month-over-month spending habits and adjusting as necessary. There’s a lot of promotions and upselling going on in the app, so something to be weary of.
I also set reminders months in advance for bigger annual expenses (car insurance renewal, property taxes due, etc), so I can make sure I’m on track with my savings to have everything covered.
The first bill from your paycheck should be to pay yourself first, even if it’s only $5.
Use a budgeting tool, such as Mint or YNAB, Personal Capital. A handwritten budget or spending plan works too. I use Mint.
Use Google calendar or a paper calendar to add all your regular and irregular bills. Once the bill is paid, mark it PAID first to the calendar entry (I color-code my bills green). For example: Pd-Electricity. Seeing all the PAIDs in monthly view is joyous.
I have been using YNAB for years and haven’t paid a dime of interest on credit cards in over 8 years and I don’t live paycheck to paycheck any longer either. YNAB makes you plan how to spend the $ you only have in your account at that moment before you get paid again. No forecasting unearned money. All the other budget apps out there only show what you have spent after the fact and that is too late to overspend or not have enough for all the bills. Save $ in advance for upcoming purchases.
You are right, @sfree . Mint, for example, focuses on showing you what you’ve spent or tracking, which is what I want. I also like to run simple visual reports for an overall view. I tried YNAB some years back and it had some good features, but for me, it added unnecessary complexity with too many moving parts. If you know what you want your money to do, and I do, then simple is better. That said, I still use a spreadsheet for planning . Like Dave Ramsey says, give every dollar a name, long before YNAB cottoned to it.
I have found that if I have auto payments on my bills it is taking out and I don’t miss it. Also, rent, car insurance, and gas are #1 withdrawals every month. Like I said, you don’t miss it when it is taken out. Ll lol
I have found that having my bills payments on auto withdrawal gets me from falling behind. Not seeing the money, you don’t miss it. The top ones are my rent, gas, and car insurance. Never spend on personal things. I have gotten my
I also use mint app. It is very informative about what I did each month. And the progress is on keeping my credit card paid and down on unnecessary spending.
the first time i have ever done this was this year when my son told me to let them take my car payment out of my bank account and its awesome i never miss a car payment
Did anyone attend the event? It was full of great discussions around budgeting, saving money, et al. I’ll be sure to share a recording of the event when we get one!
. Like Dave Ramsey says, give every dollar a name, long before YNAB cottoned to it.
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