Did you know that only one in three Americans prepare a budget every month to track their income and expenses? That means a majority of people (two-thirds, to be exact) do not use a budget to track their money!
If you are paying off your debt or saving for purchases such as a big trip, down payment on a home, or a wedding, a budget is the foundation for reaching these goals. I know what you’re thinking: “Brittney, budgets are so boring and stressful! They’re hard to follow! Plus, it’s summer and I don’t want to give up my iced latte every morning!” Look, I get it. I also know that, in order to become aware of your money and spending and saving habits, you must learn how to budget consistently. Here are three quick tips to get you budgeting and to help you see budgets in a new, fun way!
1. Understand what a budget really is.
A budget isn’t a scary, restrictive plan that cuts out all the fun in your life. It’s simply a way to become aware of your money and to track your income and expenses regularly. This process ensures that you are using your money in alignment with what you value most and what is most important to you.
If you say you want to afford a fabulous summer beach getaway while also saving for retirement, and yet you are spending your money eating out too much, or paying for things you really don’t value, you aren’t in alignment with what is important to you. It’s been said that you can learn about someone by the way they spend their money. When you consistently use a budget, you empower yourself for better choices. You simply become aware of any bad spending habits, and then free up money for the things you really do want in your life.
2. Track everything in your budget.
… And I do mean everything. It may seem tedious in the beginning, but it is the only way you will attain the clarity you need to ensure your budget can support your goals. There are many automated systems out there to help you track your expenses (such as Mint.com or the Level app), but I like a good old Excel spreadsheet where you have to enter your transactions manually. It helps you maintain awareness of your money week after week. If you have to log every transaction, you begin to think twice about spending money. After all, it will be one more transaction to log later!
3. Plan weekly money dates.
I cannot tell you how much “money dates” can help you transform your financial life. I developed them a few years ago to help clients have more fun budgeting their money, as well as to realize that they have control over how their money is being used. By scheduling a date with your money every week to update your budget, review your spending, and forecast any upcoming expenses, you are able to consciously make decisions. This is opposed to the reactive decision making most people fall into when they avoid looking at the big picture.
I know a budget can seem scary, but it’s really just a tool you need to manage in order to fund your dream life today and in the future. When you plan weekly money dates, you show that you are serious about becoming a financially wise woman, and want to continue to improve your financial well-being. Over time, money dates will become a habit for you. Before you know it, it will be so habitual that if you don’t do it, it feels weird. With summer here, this is the perfect time to hunker down with a pitcher of cold lemonade and make your very first money date.
If you’re just starting out on your path to financial wisdom and you’d like more accountability to your financial goals, consider joining a class or group. I run a six-week money class at FWWmoneyclass.com and those who join us get lifetime access to a wonderful and supportive community of women in our private Facebook group.
Now it’s your turn. What tips will you use to help budget your money effectively every month? Remember, it’s all the small steps that add up — don’t underestimate the power of taking action on even one of the tips I mentioned.
Leave a comment below and share which tip you liked best.
Brittney Castro is a member of the DailyWorth Connect program. Read more about the program here.