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Finally Frugal: Budget Creation Tips for People Who Hate Managing Their Money

Not all of us are natural savers or number crunchers. Whether you’re the type who likes to do their best to avoid reality or the type that thinks of your credit line as a way to buy some of the finer things in life, maintaining a budget is an essential fact of life for everyone who doesn’t have millions in the bank (or let’s face it, even if you do). In any case, here are some tips for the spreadsheet averse.

Start Simple

When boiled down to its essence, a budget is basically your monthly income minus all your expenses. These expenses include utilities, rent, groceries, car payments and any other items that you have to pay each month like health insurance premiums or student loans. Whatever is left over can be used on things like food and drinks, movies, the gym and so forth.

Ideally, you should put some of this leftover cash into a savings account each month. Even if it’s just $50 or $100 here and there, these smaller amounts will add up over time and start to look like a good chunk of change.

Budget with Broader Categories

First, you’ll want to know how much you’re making, as well as things like how much you’re contributing to things like a 401k and paying in taxes each month.

Accounting for how much you spend on food and rent each month is essential if you’re going to be successful in spending less. But, allotting realistic amounts to a broad category may make it easier to stay on track, rather than fretting over whether you spent as much money at the market this week as last week.

Rather than spend a lot of time micromanaging certain details, there are plenty of online budgeting tools that can help you get a handle on what you’re spending, all from the comfort of your mobile phone.

Eliminate Waste

Another important component of budgeting is trimming the fat where you’re overspending. For example, you may want to take a hard look at things like subscriptions you don’t use much, gym memberships that you’re not taking full advantage of, or consider cutting the cord with your cable company in favor of streaming services.

In addition to memberships and services you may not need, start being more mindful about the food you never quite get round to eating each week. Try not to overbuy and use leftovers in a breakfast omelet or bring them to work instead of going out for lunch.

Give Yourself Some Space for a Treat

We’re going to venture a guess and assume you don’t love budgeting because, at times, it can feel like you’re practicing austerity. One of the biggest mistakes in budgeting is not allowing yourself to buy a bottle of wine or a pair of shoes here and there. As long as you can afford it, a meal out, a night on the town or a new item here and there isn’t going to make or break you.

Another way to think about this is to give yourself an allowance—a specific amount of money set aside for things like fancy coffees or something silly here and there is okay now and again. Just put a cap on these kinds of purchases to stay within your means.

Learn Proper Credit Utilization

While racking up credit card debt is a peril we all must contend with, having credit cards can be a real asset in helping you maintain a budget.  Responsible credit card use can help you obtain loans down the road if needed, secure an apartment or get a better rate on your next car. For some people, using a credit card to track certain expenses makes it easier to stick to a budget than if you were paying for all expenses from one lump sum in your checking account.

Make it Easy to Save

If your paycheck comes via direct deposit, ask your employer if it’s possible to put a portion of your money into a savings account rather than the full amount in your checking account. Many savings accounts limit the number of transfers between accounts to disincentive overspending, or better yet, set up an account at a different bank so you’ll have to go in person if you’d like to make a deposit.

Set Goals

If you’re saving for a specific big-ticket item like a trip or a new car, success may seem like a long way off. Make small savings goals each week and acknowledge the small milestones. Over time budgeting will certainly get easier, and you may even find you like it (or, at least saving more money).

 

Isabel O’Connor contributes her wise words to a range of personal finance blogs. She has learned the hard way how to manage her finances and is now leading a debt free life.

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