An easy way to save money: how to start a budget
Yes everyone cringes when they hear the word budget. Budgets aren’t fun, but the end result is rewarding. Your budget isn’t to control you it’s for you to control your money. If you’re like me there are many leaks in your savings. Money spent at restaurants, shopping, or maybe even on a good deal you found but didn’t really need.
Here are 3 quick tips to start a budget and grow your savings.
- Learn where your money went. If you never looked through every item you purchased over a month you’ll be surprised by the details. Tally up your total spend per month over the last 3 months by category: restaurants, groceries, housing, shopping, subscriptions, etc. An easy way to do this is with sites like Mint, You Need a Budget, or Personal Capital. These sites link to your bank and credit card accounts, and allow you to view transactions and trends.
- Tell it where to go. During step 1 you probably found out you may not need that many trips to the coffee shop, so many visits to the mall, or that music subscription you rarely use. Now is the time to decide how much you should spend in each category including your saving and investing. Give each category a dollar amount.
- Track if it got there. You have a target for your spending. Track your progress throughout the months. I recommend using the budgeting sites already mentioned since they automatically imports transactions and categorize your spending. You can view real time how your trending toward your goals.
Starting with any budget is better than no budget. Don’t make it more painful that it needs to be. Tweak it over time as your goals and income change.
What are your tips for starting a budget and sticking to it?