4 Tips for Better Budgeting in 2019
, by Rob Kaufman
Okay... was one of your New Year's resolutions to stick to a budget? Now that we're a little more than a quarter of the way into 2019, how are you doing with your budget? If you're not where you want to be, no worries, there's still plenty of time to get on track.
Why is a budget important?
It doesn't matter what your final goals are, you need to know where your money is going (and how to save some of it) so that you can:
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Plan for retirement
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Pay off your mortgage
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Help your children pay for college
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Invest for the future
...and take care of anything else you feel is important for you and your family. Here are some tips to help you budget correctly and reach these goals:
Top 4 Budget Tips
Before Saving, Delete Debt
One of the primary reasons people budget is so they can start saving money for the future. However, saving money begins with getting rid of debt. Once your debt is gone, you've given yourself some monthly income with which you can use towards savings - whether it be for a new car, a home, or even for retirement.
There are quite a few ways to get rid of debt and the one you choose depends on your individual situation. Here's some points from the experts to help get you started.
Budgeting isn't a Guessing Game
In order to create a budget, and stick to it, you need to know your numbers. If you don't use financial software, you probably have access to your bank and credit card statements. Check those records to you know exactly (or close to exactly) where and how you spend your money. As you do this, you'll see that using hard numbers can help get you closer to creating - and following through on - a real budget.
Be Realistic - Make Your Budget "Actionable"
For those of us who have tried dieting, you know the "all or nothing" position rarely works. "That's it!" we say, "Not one dessert. Not one piece of bread." Before we know it, we're eating more cake and sourdough than we did before we started the diet. The same goes for budgeting. To cut every single "extra" out at once will only make you feel deprived and eventually want more of what you're missing.
Budget on a gradual basis. For instance, cut a few non-essential expenses like buying yourself a latte two times a week instead of four or enjoying takeout twice a week rather than five. Slowly lessen the non-essentials and you'll find you're more likely to realize you can cut down on spending.
Tell Your Friends What You're Up To
We typically don't talk with our friends about money problems. We like to "keep up with the Joneses" or, in other words, pretend like everything's financially okay.
That's why it's important to let those around you know that you've set a budget and need help sticking to it. Offer to have a pot-luck dinner rather than go out to a restaurant. Don't allow them to talk you into buying an expensive pair of jeans just because "it's the rage" and "you have to have them". If they understand, they'll be more than happy to help you stick to your budget - and that's true
friendship!
Check out how myFICO members create, execute and stick to their budgets at myFICO forums. It's a place to learn just about everything about credit... and more!
Rob is a writer... of blogs, books and business. His financial investment experience combined with a long background in marketing credit protection services provides a source of information that helps fill the gaps on one's journey toward financial well-being. His goal is simple: The more people he can help, the better.