Budgeting is one my least favorite subjects. One, because I am one of those right brained people who avoids math and numbers at all costs and two, because I was never taught how to make a proper and realistic budget.
But as the new year rolls around we inevitably hunker down and try to crunch numbers and make a plan. Since it is not something that I have down pat, I have been doing a bit of research on the subject to help make this process finally click in my head and on paper.
Be Realistic: Making your plan too strict on paper so you can feel good about buckets of imaginary money you're going to accrue in the near future isn't going to help you in the long run. You do still have to enjoy living; try to keep that in mind so you can actually stick to the budget you set.
Are You Leaking? Are you trying to pick your jaw up off the floor after you've crunched the numbers from the past few months? Then there is a leak or two that you need to plug. Find it and adjust. For us it was groceries and going out to eat and we have started a new system that has been working out great so far.
The Little Things: The inexpensive dailies really add up. What is it for you? Coffee, bagels, magazines, taxis?
Make Substitutions: You don't necessarily have to stop doing everything you love. Just find a better way to do it. If you love coffee, get a french press for home or work and start making your own instead of dropping the money at a coffee shop.
Go Old School: I think one of the most difficult things in keeping track of money is due to this cashless society we live in. It makes it so much harder to understand where our money disappears. The best way to not overspend is to carry cash whenever possible — out to dinner or to the grocery store, if you take out exactly what you have allotted for that outing you won't be splurging on anything else cause you won't have any more money to use. It's an easy way to keep yourself on track and not splurge in the moment.
Coupons: Not the clipping type? Don't worry, use smartphones. Coupon apps like Coupon Sherpa or Mobile Coupons are the new Sunday night with scissors.
Buy In Bulk: Do it anyway you can. If it's with boxed or canned items, household supplies, or anything routinely used it can really make a big difference in the long run.
Cut It Out: What monthlies can you live without? Do you really need Netflix and Hulu Plus? Get rid of something for a month or two and see if you really even miss it. Something more interesting might just fill its space. Don't worry! If you really feel the loss, you can always go back.
Auto Savings: If you are not great with transferring money into your savings account let the bank do it for you. Set up an amount you know you can save each month or paycheck and set up an auto transfer. You can always change it or cancel it for a period that you will need more money.
Treat Yo Self: Make a list of small inexpensive things you can splurge on. Something out of the ordinary to look forward to. Set a small price limit, allot for it and choose one each week or two. It's like a little pat on the back for keeping up with your budget. If you just keep denying yourself over and over you will get worn down and not likely stick to the constraints you've made.
Online Budgeting: Mint, MoneyStrands and You Need a Budget are all online and offer tips and classes to get you started. And there is always Quicken if you want to go the software route.
Mobile App Budgeting: Modern day tracking software like Mint, categorize your purchases, help you create a budget and send you self set alerts on the go. Other popular finance apps are MoneyStrands, You Need a Budget and Smarty Pig.
Becoming Savvy: CNN and MSN Money have great personal finance resources to get information from.
Online Savings Accounts: They have a higher annual percentage yield. So if you have a larger sum of money that you have just been keeping in your bank's savings than you might as well make more on it. You can transfer it between your accounts so it is still available to you. Ally or ING are two popular online accounts.
Do you have any budgeting words of wisdom to share?