Keep it simple. Be sure to set realistic and attainable goals. Start by identifying your budgeting goal, maybe to buy a house or start saving money for retirement, and then create a realistic plan to achieve this goal. Keeping your goal in mind will help you stay focused as you learn to budget more effectively.
Blast budget-busters. Knowing your weaknesses is key to budgeting successfully. If you are battling a late-night QVC addiction, back away from the remote. If you have a weakness for shoes, limit trips to your favorite shoe store to once a month. Identifying habits that tend to get you off course is a great step towards better budgeting.
Make it worth the wait. To avoid making impulsive purchases, try waiting seven days prior to making any large purchase. These seven days in-between finding the item you want and taking it home with you give you ample time to compare pricing, shop around, and make sure that this purchase represents the best possible use of your money.
Leave wiggle room. A budget that is too rigid is a recipe for budget failure. Pad your budget to allow for unavoidable, last minute expenses. These funds can go towards infrequent bill such as oil changes or towards unexpected expenses like replacing a flat tire.
Prompt is key. Paying bills on time is not only great for your credit, but it can also save you money. Credit Unions, banks and credit card companies often levy hefty fees for late or missed payments. Avoid these fees by paying bills on-time or a few days early.
Track your spending. Tracking your spending helps you identify where you are wasting money. This process does not have to be tedious or time consuming and can easily be done from the statements of your credit or debit cards. Keep all dining and entertainment related receipts in a specified section of your wallet and tally them up at least once a month to evaluate your miscellaneous spending. Knowing how much you spend on entertainment and food will enable you to make necessary cuts and budget more effectively for these categories.
Get a Sponsor. Now that you own your spending problem, find a sponsor. Making a list prior to entering a store or taking a buddy are ways to hold yourself accountable for your spending and reduce impulsive purchases.
Following these simple steps will have you on your way to saving money in no time.