Having a monthly budget is a hallmark of adulthood.
However, sticking to a monthly budget is easier in theory than in practice.
But as with any other skill, staying on budget gets easier with regular, consistent practice.
Here are 15 tips for staying on track with your monthly budget.
•Pay your savings “bill” first.
Treat saving as an obligation, and if you have direct deposit, have a set amount funneled directly to savings from each paycheck.
•Know your income
Know how much the earners in your household make in a week, month, and year.
This may not be easy for seasonal workers or self-employed people.
If this is you, underestimate your income by a small percentage to give yourself a margin of safety.
Knowing what you make is the first step for setting goals and knowing what you can afford.
•Give yourself a weekly allowance
Just as you may give kids an allowance on the stipulation that once it’s gone, it’s gone, you and your partner should do the same.
Spend your last dollar on Wednesday’s lunch out at work?
Brown bag it till next week.
•Keep receipts and review them weekly.
Knowing what you spend is the flip side of knowing what you make.
Collect receipts from your pocket or purse every night and save them. Then, review spending weekly.
You may be surprised at what you learn about your spending habits.
•Balance your checkbook
While you’re at it, see if you qualify for overdraft protection from your bank or credit union. If so, sign up.
Even if a small monthly fee is involved, it’s nothing compared to the $35 or so you’ll be assessed if you bounce a check.
•Plan meals and shop ahead
Eating out is a huge expense. Avoid running out of food by planning every meal and shopping weekly.
Warehouse stores like Costco can be a double-edged sword. You can really save on things you use frequently, but there are plenty of temptations for impulse buys, too.
Know your propensity for giving into temptation and plan your shopping destinations accordingly.
•Give yourself permission for the occasional treat.
Life shouldn’t be all frugality.
If you never allow yourself a little splurge, resentment builds up, and you could end up in a frustration-fueled spending spree that will leave you feeling even worse.
It’s okay to treat yourself occasionally.
•If you’re ambitious, make a spreadsheet for your regular purchases.
In this spreadsheet, list items you buy most often, along with the cheapest price you’ve found.
Look at sales circulars online to help you learn where you’ll get this week’s items at the best price.
If you have time to go to multiple stores, you can tailor your list accordingly.
•Set goals
Financial goals may be anything from paying off a credit card to buying a house, but you’re more likely to reach them if you define them.
Everyone wants to be financially better off, but you won’t get there unless you know exactly what “better off” means to you personally.
•Get your tax withholding right
If your withholding is too small, you’ll owe taxes in April. If it’s too large, you’re essentially giving the government an interest-free loan all year.
Go over your tax withholding forms whenever you have a life change like a partner’s new job, a marriage, divorce, or the addition of a new family member.
•Build an emergency fund
Shoot for enough to keep your family going for six months in the event of a financial catastrophe.
Even if you don’t reach this goal, you’ll be glad you set aside money when the car overheats or your child breaks his arm.
Remember that any emergency fund is better than none.
Source:www.blog.mint.com