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Creating a budget is easy. Sticking to it is hard. Luckily, following savvy budgeting and saving tips can help. According to recent surveys, 74% of Americans have a monthly budget, but 84% of those with a budget fail to stick to it.1\u00a0If this sounds familiar, these budgeting and saving tips can help you create a more realistic budget you can feel motivated to stick to.\n
Budgeting is a means to an end. If you want to stick to your budget, you need to keep that end in sight. Before you start, ask yourself why you want to save money. The reason for creating a budget is often more important than how well you stick to it.<\/p>\n
How to Find Your \u201cWhy\u201d<\/strong><\/p>\n Start by asking yourself a simple question: \u201cWhat\u2019s most important to me?\u201d For some, a clear monthly budget can provide the means to save for a house or a summer vacation. For others, budgeting is the key to escaping a mountain of credit card or student loan debt.<\/p>\n How to Stay Motivated<\/strong><\/p>\n If you want to stay motivated, take your \u201cwhy\u201d and make it visual. Find a picture of your dream house or perfect vacation spot and place it where you\u2019ll see it every day \u2014 like your office or refrigerator. That reminder will help you keep your goals in sight (literally) and avoid the temptation to exceed your monthly budget or make an impulse purchase.<\/p>\n Budgeting and saving tips won\u2019t be very meaningful if they\u2019re not realistic. That\u2019s why it\u2019s important to create SMART savings goals. SMART is an acronym that stands for:<\/p>\n For instance, saving for a new car is a specific, measurable goal. You can make it even \u201cSMARTer\u201d by attaching a deadline \u2014 say, saving $6,000 for a down payment within 18 months. The more specific and measurable you can be with your financial goals, the easier it will be to track your progress and fit these goals into your monthly budget.<\/p>\n Create Long-Term Savings Goals<\/strong><\/p>\n Another of the most helpful budgeting and saving tips is to divide your savings into short- and long-term goals. Long-term goals can include:<\/p>\n Even though some of these goals may be years away, you can still make them SMART. For instance, set a tentative date for your retirement. That way, you\u2019ll be able to monitor your retirement savings and ensure you can achieve your dream retirement lifestyle.<\/p>\n Create Short-Term Savings Goals<\/strong><\/p>\n Not all of your savings goals will be long-term. Short-term goals can be even more motivating since they\u2019re more immediate and tangible. Common short-term goals include:<\/p>\n You can make these goals SMART by ensuring they\u2019re realistic and attainable, given your monthly income. For instance, if a summer vacation seems too lofty, try saving for a weekend getaway or even your next date night. The point is that by creating SMART goals, you\u2019ll have more motivation to stay on budget.<\/p>\n Every budget must account for monthly income and monthly expenses. One of the most important budgeting and saving tips is to keep track of every dollar you spend.<\/p>\n Keeping Track Digitally<\/strong><\/p>\n It should come as no surprise \u2013 there\u2019s an app for that! You might consider downloading an app such as You Need a Budget (YNAB) to help you stick to your chosen budgeting and saving tips. If you already have a household budget, it\u2019s vital to compare the expenses you plan for in a given month with what you\u2019re actually spending.<\/p>\n The Envelope System<\/strong><\/p>\n This method is exactly what it sounds like. Each month, pay your regular bills (rent, mortgage, utilities, etc.) and put aside some money for savings. Then, take the rest out in cash. You can then stuff this cash into a series of envelopes, each representing a category like:<\/p>\n By paying for these items in cash, you\u2019ll limit the amount you\u2019re able to spend each month. You can choose to roll over any leftover money into the next month or move it into another category.<\/p>\n One of the reasons you may have struggled with budgeting and saving tips in the past is that no two months come with the same costs. Sure, things like rent or insurance premiums may remain constant, but the cost of groceries can vary, especially in an era of increased inflation.<\/p>\n Your first step should be to separate your fixed and variable expenses. Then, you can find strategies for reducing the amount you spend on variable expenses.<\/p>\n Fixed vs. Variable Expenses<\/strong><\/p>\n Fixed expenses refer to costs that remain the same from month to month. Common fixed expenses include:<\/p>\n Utility bills are often considered a fixed cost since they\u2019re generally the same each month.<\/p>\n Variable expenses are those that change from month to month. Common examples of variable costs include:<\/p>\n Your variable expenses, therefore, include your meals as well as your discretionary spending. If you want to improve your monthly saving habits, start with your variable expenses.<\/p>\n Budgeting and Saving Tips to Reduce Variable Expenses<\/strong><\/p>\n How can you use budgeting and saving tips to cut down on your variable expenses? Here are some ideas for trimming your budget:<\/p>\n If this doesn\u2019t sound exciting, try to make a game of it. During your first week, challenge yourself to buy one less gourmet coffee on the way to work. Then, the next week, challenge yourself to cut out something else. You may be surprised at just how quickly these small expenses can add up, which also means that cutting back on expenses can lead to major savings.<\/p>\n Of all the budgeting and saving tips you\u2019ll hear, this is the most important. If you haven\u2019t already, create a realistic monthly budget for you and your family. Now that you\u2019ve identified your fixed and variable expenses, it will be easier to create a workable financial plan each month. Here are some specific strategies you can use to create a monthly budget.<\/p>\n The 50\/30\/20 Rule<\/strong><\/p>\n One of the most common budgeting and saving tips is to use the 50\/30\/20 rule. In this method, you\u2019ll break up your budget as follows:<\/p>\n You may need to adjust these percentages based on your goals and current financial situation. For instance, if you\u2019re trying to eliminate debt, you might contribute a bit more to your monthly payments and less to your savings, at least for the time being.<\/p>\n The Zero-Based Budget<\/strong><\/p>\n The zero-based budget means that each month, your income minus your expenses always equals zero. This means that you\u2019ll break your budget into various categories and assign a specific dollar amount to each category. In essence, every dollar has a job. This can be a helpful approach if you\u2019re detail-oriented, and the benefit is that it keeps you within budget on every household expense.<\/p>\n Create an Emergency Fund<\/strong><\/p>\n According to a recent report, over 20% of Americans have no short-term savings. If you\u2019re one of them, make it a priority to save enough money to cover three to six months\u2019 worth of expenses. Having an emergency fund will prevent you from dipping into your other savings if you have an unexpected expense or career setback, and it will also keep you from reaching for your credit card.<\/p>\n Budgeting and Saving Tips You Can Count On<\/strong><\/p>\n The above budgeting and saving tips will help you manage your money better, and they can also help you achieve your financial goals. By sticking to a budget, you and your family can build your savings and avoid the high cost of credit card debt. The end result will be a balanced budget \u2014 as well as a balanced lifestyle and peace of mind.<\/p>\n If you have any questions or would like guidance, give us a call at (336) 391-3409<\/a>.<\/p>\n Sources:<\/p>\n <\/p>\n<\/body>","protected":false},"excerpt":{"rendered":" Creating a budget is easy. Sticking to it is hard. Luckily, following savvy budgeting and saving tips can help. According to recent surveys, 74% of Americans have a monthly budget, but 84% of those with a budget fail to stick […]<\/p>\n","protected":false},"author":3,"featured_media":3371,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","footnotes":""},"categories":[83],"tags":[],"class_list":["post-3370","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-financial-planning"],"yoast_head":"\n\n
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