Tips for Practicing a Budget

Getting started with budgeting can be intimidating, but it’s easier than you think! A great way to get started is to practice making one. Here we will go through what that entails to get you started off on the right foot!

How to “Practice a Budget”

1. Set realistic goals. What do you want to achieve with your budget? Do you want to get out of debt? Do you want to save for a specific goal, like a down payment on a home or a new car? Do you want to get a better handle on your spending? Do you want to stop feeling weighed down by always feeling broke and poor? Once you know what you want to achieve, you can find the motivation for starting a budget and create a new you that will bring you to reach your goals. At Financial Wellness we can help
2. Track your spending. This is the most important step in budgeting. You need to know where your money is going in order to create a budget that works for you. There are many different ways to track your spending, such as using a budgeting app, a spreadsheet, immediately emailing yourself what your money was spent on or even just a notebook. It has never been easier to track our spending. What matters is you find a way that works for you, do it and don’t get down on yourself when you stumble. It takes at least 30 days to create a habit, keep working at consistency with using your budgeting system.
3. Categorize your expenses. Once you know how much you’re spending, its helpful  to categorize your expenses. This will help you see where your money is going and identify areas where you can cut back. There are many different ways to categorize your expenses, but a common method is to divide them into fixed expenses (like rent, car payments, and insurance) and variable expenses (like groceries, gas, and entertainment). Or simply put “Must Haves” and “Recreational” or “What We Could Live With Out”
4. Set spending limits. Once you’ve categorized your expenses, you can start to set spending limits for each category. This will help you stay on budget and avoid overspending. This is the hard part, telling ourselves “no” when we want something but it doesn’t fit into our spending limits. Not telling ourselves no more often on spending can get us into a sad financial place. Later when we are regularly reviewing our budget, we can look at the thing I struggled to tell myself no on buying. Is it something I want to find a way to fit in my budget going forward? Maybe there is something on my set budget I’m willing to not have because the thing I had the courage to tell myself no on is more important to me than something else on my existing set budget.
5. Review your budget regularly. Your budget is not set in stone. As your income and expenses change, you’ll need to adjust your budget accordingly. It’s a good idea to review your budget at least once a month to make sure it’s still working for you. When we do this, we give ourselves the ability to keep growing with understanding of what we really value. We get to see the things we want to find a way to fit into our set spending limits and find out what we care about and what we can live without.

Here are some tips for practicing a budget

• Be patient. It takes time to get used to budgeting and to see results. Don’t get discouraged if you don’t see results immediately. Just keep at it and you’ll eventually reach your goals. If I can do this, you can too.
• Be flexible. Things don’t always go according to plan, so be prepared to make adjustments to your budget as needed.
• Give yourself permission to get it wrong. Just keep working on this and you will get better. It takes at least 30 days to create a habit, make it repetitive and eventually it will stick
• Don’t be afraid to ask for help. If you’re struggling to create or stick to a budget, there are many resources available to help you. Download our free budgeting tools, they will take you step by step how to fill these budgets out. Reach out to us, email or call and we can help you find your path to financial wellness.
• Budgeting is a skill that takes time and practice to develop. But it’s a skill that can be very rewarding. By following these tips, you can learn how to practice budgeting and reach your financial goals. If I can do this, you can definitely succeed at this.

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