Best Money Saving Tips – How to Budget Edition

how to budgetThis weeks money saving tips include how to create a budget that will work for your financial situation. Learning how to budget is an important skill that is necessary if you are going to be able to save money.  Here are the basic steps:

How to Budget

  • Set Goals – One of the most important steps in creating a budget is to write down both personal and financial goals.  Personal goals could include getting marrieds or getting a masters degree. Financial goals could include buying a new home or early retirement.  By articulating your goals and estimating the cost, you are more likely to take concrete steps toward achieving them.
  • Track Spending – Without understanding where your money is going it will be impossible to know if you are saving enough money to meet monthly expenses or leave enough to achieve your goals.  There are many ways to track spending but why do it manually when you can automate this time consuming task?  Most banks include spending reports with online banking and is a great way to instantly see where you are spending your money.  Other ways to track spending include Mint.com which allows you to create budgets as well as link all of your financial accounts.
  • Create Budget – Create categories based on your spending analysis and goals that you have set for yourself.  This step involves prioritizing and negotiating your spending with your spouse and can be difficult if you don't share the same goals. Setup your budget with a free app from Mint.com and watch your progress toward your savings goals.
  • Monitor Progress – Like any good plan you will need to monitor and adjust when necessary to stay on track.  If you find the amount you budgeted for a category is insufficient then you will need to take money from another category that has a surplus.  One of the biggest reasons people are not successful with their budget is they fail to follow up to see how they are doing with staying within budget. Today's budgeting apps and software like Quicken make monitoring your budget easy, and spending is updated almost instantaneously so you know exactly where you stand financially.

 

Creating a budget is the easy part, following it can be a challenge at times however, if you create a realistic budget you will have a much better chance of success with your spending and savings goals.

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20 Responses to Best Money Saving Tips – How to Budget Edition

  1. Kelly 04/29/2016 at 7:26 pm #

    It is easier to budget and do it religiously when you have a purpose and goals. Thanks for the tips Paul.

  2. Matthew 04/25/2016 at 3:13 pm #

    It seems simplistic but this advice is solid … discipline yourself, follow it, and you’ll prosper!

  3. The Millennial Budget 04/24/2016 at 12:27 pm #

    I like how the first step is to step goals. This is often an overlooked step as people who have budgets just go straight to the numbers. Goals needs to be made for the individual themselves and not based on what other people are doing. Everybody has different cost and income which makes every budget unique. Also, everybody has unique goals that they want which can impact their budget.

  4. Kelly 04/23/2016 at 4:19 pm #

    These are the most important tips in money saving! Paul, without goals, I think saving would be directionless. With goals, it becomes easy to save and do the next strategies.

  5. Jayson @ Monster Piggy Banks 04/20/2016 at 3:50 pm #

    Goals give direction in saving money. The clear and specific goals the better.

  6. Raaj Trambadia@Make Money Blogging 05/22/2012 at 12:11 pm #

    Creating a budget is always a plus point! And yeah, all the other money left apart from the budget can be spent at the club! (:D

  7. Aaron Hung 05/09/2012 at 6:41 pm #

    We like to keep an excel spreadsheet of all our debts and keeps tracks of how much we paid each month. It’s good to keep track so you can stay focus on your goals

  8. Untemplater 05/08/2012 at 11:24 pm #

    I had to spend a lot of money to help my parents last month so I’m gonna be on a tight budget for the next few months. Time for me to start eating pbj for lunch! -Sydney

  9. SB @ One Cent At A Time 05/06/2012 at 7:27 pm #

    Thanks for liking my article and mentioning it here. have a good rest of the weekend.

    • Paul 05/06/2012 at 7:37 pm #

      You’re welcome SB, you do the same!

  10. Household Budgeting Guy 05/06/2012 at 4:10 pm #

    Budgeting? Did someone mention budgeting? Heard the echo across the ‘Net and after traipsing far and near, found myself here.

    The most important tip to give about budgeting is to make it personal, not an abstract thing that can easily “go away”. A written budget is to be internalized, becoming a fabric of everyday living.

    • Paul 05/06/2012 at 7:03 pm #

      Couldn’t agree more. That’s why the first step should be to set goals. If you don’t have goals, a budget is an exercise in futility! Thanks for stopping by Budgeting Guy!

  11. Modest Money 05/06/2012 at 12:55 pm #

    As someone who’s been meaning to start an official budget, these tips are helpful. I’ve been careful with my money lately, but without actual goals and proper monitoring, it is far too easy to let my spending slip and not be as disciplined.

    • Paul 05/06/2012 at 7:05 pm #

      I use the Mint app to keep track of my finances. It categorizes transactions automatically so it makes tracking your spending easy!

  12. krantcents 05/06/2012 at 11:06 am #

    Good points! The most important aspect of your suggestions is monitoring. I monitor and keep trying to improve or reduce the expense.

    • Paul 05/06/2012 at 12:17 pm #

      That is where most people struggle with finances. It does no good to create a budget and then not monitor your spending!

    • I second that. “What gets measured gets managed.” You can’t forget to measure your progress.

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