15 Tips To Become A Master Budgeter
I think no matter who you are, how old you may be, or where you live budgeting has been a part of your life. I find myself to be very lucky in that fact that my mom had me start budgeting around the 6th grade. When we did our semiannual school clothes shop she would say you have this amount of money to buy everything you need, you choose how you spend it. 6th grade me wanted to initially blow it all on maybe a total of 5 items from Victoria Secret Pink. Instead it really taught me to look at the price of what I buy and really say is it worth the price?
When I graduated college and moved to the Bay Area into my first grown up apartment alone, I really had to put my budgeting skills to good use. I thought I was making good money until rent and all the bill hit! At that time I really made a strong effort to find different budgeting tips and tools that would allow me to save money, but still have a life.
Below are 15 tips and tricks I have learned in the last few years about budgeting. The one MAJOR thing I will say about budgeting is that you should never be embarrassed or ashamed of your budget! If that is what you have to spend, that is ok! No item, shopping trip or friends’ approval is worth you ruining your budget.
1. Set Up a Monthly/Yearly Budget:
If you are not tracking your spending on an excel sheet or a piece of paper somewhere, you are not budgeting. I find that when people just watch their bank account they are not reaching their full potential of budgeting. Versus actually knowing how much they are spending on what, and what to put towards bills. Below is an example of a one month spreadsheet for your budget. You should have a month to month budget spreadsheet with monthly tabs, savings tab and a planned expenses tab. I set my budget up revolving around my monthly paycheck schedule. You can set it up that way, from the 1st to the 30th or 15th to 15th.
Here is the formula for the above sheet. (total income -total bills-total food-total needs-total wants)
2. Create Sections:
In each months budget you should always start out with your income that is planned for the month. Do not add side job money into your income until it is actually earned. Next should be a list of all your monthly consistent bills, with how much they are and when they are due. Then you can split your spending into three categories. I find that categorizing my spending vs just lumping charges into one streaming lists lets me really see how much I am spending in each area and where I can cut back.
1) Food: groceries, snacks, dinners out. If it is you eating, track it. I find it quite crazy how much you think you spend on food vs how much you actually do. This is also an area where you can save.
2) Needs: Gas, Home items, Amazon orders, dog food. This area is for all things that you and your household need for the month.
3) Wants: Now this area might be silly but you need to be honest with yourself. This is the section where you put stuff you bought that you really didn’t need. Sephora, HomeGoods, Clothes. You know yourself if you didn’t need it, it goes in this section.
As the month goes on and you spend, track in each section all your purchases. At the end of the month it’s nice to go back and see what you really spent or didn’t.
3. Pay your Bills First:
As I mentioned above, always map out each month how much you spend on bills and remove that from your income first. That small trick will make sure you never spend money that should go to bills. There is nothing good in not paying your bills on time. So by taking this small step it insure that your Adulting is on point, and your lights don’t get shut off.
4. Take Savings Out Second:
In the wants sections you can see that I put savings. It is always smart to take a part of your check each month and put it into savings. For me I am going on several trips this year so saving money is a top priority. Once that money hits my bank at the first paycheck of the month I take the percent I know I need to save that month and move it to my savings. This ensures I don’t spend it but also lets me know how much money I really have to work with this month. This is also where it is handy to have a Savings tab.
5. Bring Your Lunch:
When I started my first corporate job it really surprised me how much people went out to eat at lunch. For me I just don’t think it is worth it. I pack my lunch every day and bring it to work. If you spend $8 on lunch every workday you spend $160 a month. This equals $2000 a year, just for lunch! That money could pay your rent or take you to another country for vacation, but instead it just went to lunch. This idea can be applied to other small routines we have picked up as well. Starbucks for example, would it be cheaper for you to just get a Keurig and the Kcups, then it would be to go to Starbucks multiple times a week? If you ate out one time less a month for a year how much would you save? Small life changes like this can really pay out big in the end.
6. Happy Hour Menus:
This might seem insanely obvious but if you are someone who likes to eat out try to go to restaurants that have Happy Hours. That way you can still go out and feel a bit extravagant without paying as much. Same goes with finding restaurants that have days where kids eat free. Or food trucks, where you can get amazing food for only a few dollars. The great thing about our lives now is that you do not have to spend a lot on food to have good food. Get creative with eating out!
7. Stop Drinking While Out:
You might look at the line above and think hell no! But just think for a second how much you spend on drinks when you go out, at restaurants, lunches, brunches, bars. Heck even just getting free water over an iced tea can save you three bucks. Drinks are a secret way to easily go over budget, be mindful of your liquid prices.
8. Set a Savings Goal:
It is just smart to put money into your saving period. For emergencies, trips, unforeseen purchases, doctor or vet bills. Your saving account is important and should be something you pay attention to. For me I am working on saving up for a few trips this year. The way I create a savings goal is by knowing how much I need to save. Then take that number and divide it by how many months you have to save for. That is your starter savings number for each month. When that months money comes in, I move it into my savings so I cannot touch it. If I have any extra income or money at the end of the month I add it to my savings as well. It is important to keep your savings goals in mind to keep you on track with your budget. As much as I want a new foundation that money can buy me breakfast, lunch and dinner for a day on my Copenhagen trip.
Mint.com is an amazing app and website that will literally track all of your spending for you. It connects to your accounts and sees what you spends. You can go in and say I have a $300 budget for groceries this month and every time you spend money on groceries it tracks it. It even lets you know when you are close to hitting your budget for the month or if you have gone over. It takes just a bit of time to set up but can be a huge budget eye opener. If you are one of those people who say where did all my money go by the end of the month, you need this app in your life.
If you must shop, use Ebates. We all shop online now a days, it would be nice if we could get some of that money back. This is where Ebates steps in. All you do is create an account with ebates and then when you need to shop for something you go to the Ebates website and click the store through there. Each store will give you a % back on what you spend. Then at the end of the quarter they send you a check. They even will have some surprise coupons or double % back at certain stores. If you are a lover of shopping onlineand want to get money back you can sign up here:
11. If it is Not in your Budget, Walk Away:
I know we all get a bit of FOMO (fear of missing out) when it comes to shopping, makeup, skin care, clothes, vacation. So we go out of our way and over budget just to get the new Instagram famous thing. It is not worth it! If buying something you absolutely don’t need can jeopardize your budget, walk away! I know it is easier said than done, but you do not need to buy stuff to be current, instagram worthy or liked. Believe in yourself, not your stuff.
12. Cut What is Not Essential:
This step took me a while to figure out as well as get behind. One huge example of this is TV. I use to pay $116.99 a month for my DirecTV. That is $1,403.88 a year! When I moved into my new apartment I made the big decision to just get an Amazon Fire TV Stick and Hulu and Netflix. I now pay $5.99 a month ($71.88 a year, a $1,332 savings) for TV and I am so much happier without the big bill or 9 million channels I never watched. There are certain expenses in our life that we think we need, but in reality we don’t. Do you need 4 credit cards? Or can you pay off two and get rid of them? Do you have an expensive gym membership and only go twice a month? Maybe it’s time to cut the cord. Do you really need that Beauty Subscription if you like 1 out of the 5 products?
13. Post Your Goal to Keep You Accountable:
It is so easy to just turn a blind eye to your budget because you cannot physically see it every day. But you can see those new shoes, the new makeup palette that just launches, and that new car. Make a conscious effort to post budget goals around your house. Whether that be photos near your computer of trips you are saving for. A shopping list with your food budget on it to keep you mindful. Or even reminders on your phone of how much you have to spend that week just to keep you on track.
14. Every Cent Counts:
This is a skill I got very good at in College!! When it comes to everyday items try your best to pick the cheapest one. There are 16 verisons of 1 ziploc bag, grab the cheapest brand. If there are two ice creams of the same flavor, grab the cheaper one. See if there is dupes to your favorite makeup products and test that out. If you are looking for new home décor try discount store like Ross and HomeGoods first. If you want to go to the movies and it’s cheaper to see the same movie in the afternoon than the evening, go in the afternoon. Get my drift here! Every day when you buy stuff make a conscious effort to pay less on products that you know you can. Those little saved cents add up and can stretching you budget farther.
15. Create a No Calendar:
If you are anything like me and extremely competitive, than it might be fun and budget friendly for you to try some of the budget and savings challenges you see all over Pinterest. I try to challenge myself with a new one each month, just to see if I can do it. Below are some of my favorites.