Jul 20, 2023
Say Goodbye to the Money Blues: How to Simplify Your Budget in 10 Steps
Reading time: 7 minutes
Are you feeling overwhelmed by your finances? Are you constantly stressed out about your financial life and spending money? If so, you're not alone. A lot of people find budgeting to be difficult and confusing. But it doesn't have to be that way! In this blog post, PureTalk will discuss 10 ways to simplify your budgeting process, save money, and make it easier to manage spending money. It may seem hard at first but, trust us, it's worth it!
1. Make a list of your income
According to the pros at SallieMae, “The first step in creating a budget is to identify the amount of money you have coming in monthly. Look at your salary and determine your net income. Your net income is how much money you make after any deductions like interest and taxes. This is the number you should use when creating a budget.”
This seems like a no-brainer, but you would be surprised how many people do not know how much money they bring in every month. Track your income for one month so that you have a clear idea of how much money you have to work with.
This will give you a good starting point for creating your own budget now. This is important because it will help you to see where your money is going and how much you have to work with each month. If you have any irregular expenses, such as annual insurance premiums, be sure to factor those in as well.
2. Know your monthly expenses
This is also important. Track your spending for one month so that you have a clear idea of where your money goes every month. This will help you identify unnecessary expenses budget categories that you can cut out of your budget. Without this information, it will be difficult to make informed decisions about your spending. If you know what's coming in, but not what's going out, how can you make a budget that works?
There are several apps you can use to simplify your budget and help you track spending like Mint or You Need a Budget (YNAB). Alternatively, you can simply use a simple spreadsheet or pen and paper to simplify your budget. Find what works for you and stick with it.
3. Create a realistic monthly budget
Once you know your income and expenses, you can create a realistic budget that allocates your money in a way that makes sense for you and your family. Make sure to include savings in your budget so that you can reach your financial goals. A few things you can do to help yourself stay organized are:
- Use budgeting software or app
This can help you keep track of your own spending and saving habits and ensure that you are sticking to your own budgeted amount. The folks at NerdWallet have some good suggestions on apps to choose from.
- Create a budget worksheet
This can be a simple spreadsheet or even just a piece of paper. List your income and expenses in separate columns and allocate your money accordingly. Making your budget simple in this manner will save you lots of time and effort.
- Set up a budget meeting
Once a month, sit down with your spouse or partner and review your already budgeted amount to see how you are doing. This is a good time to make any necessary adjustments.
- Open multiple accounts for different things
Many people don't realize that you can have more than one bank account. For example, an emergency fund that you keep in a checking account, a regular savings account to remind to you save money, and investment accounts.
4. Automate your finances
Setting up automatic payments for the various categories of bills you pay that are the same amount every month is another really easy way to simplify budgeting and simplify everything. Reoccurring monthly expenses like rent or mortgage, streaming services, car payments cell phone bills and car insurance can be set up to come directly from your checking account which is a fairly simple way to pay and save you time and help you stay focused on the big picture.
Also, consider using auto-transfers to move money into your savings account each month. This will help you stay on track with your budget and avoid late fees or overdraft charges.
5. Review your budget and financial life regularly
Your circumstances may change over time, and so will your financial goal and financial life. So it is important to review your budget on a regular basis and make adjustments as needed. This will help ensure that your budget remains realistic and relevant.
6. Stay flexible
There will be months when you spend money more than you planned to spend or earn money less than expected. That's okay! Just make sure to adjust your budget accordingly so that you don't end up off-track. Non monthly expenses like birthdays, registration renewal or tuition payments should be accounted for in advance, so you're not caught off guard. Don't be surprised when Christmas shows up!
7. Cut out unnecessary expenses
If there are certain items in your budget that are not essential, consider cutting them out or reducing their frequency so that you can free up more money for other purposes. For example, if you eat out frequently, try cooking at home more often. If you have a gym membership but never use it, cancel it. There is no shame in trimming the fat from your budget; doing so will only make it easier to stick to.
8. Make room for fun
It is important to enjoy life and treat yourself occasionally, even if it means going over budget. Just make sure that these fun expenses are factored into your overall budget so that they do not throw off your entire financial plan. Think of it as saving your "Fun Money". Your fun money will be for things like vacations, nights out with friends, and other activities that you enjoy.
9. Communicate with your family or roommates about your budget
It is important to be on the same page as the people you share finances with so that everyone is aware of the household's financial situation and can make informed decisions accordingly. Having everyone on the same page regarding finances makes everything run much smoother. As the old saying goes, "Teamwork makes the dream work".
10. Seek professional help if needed
If you are struggling to stick to a budget or manage your finances, there is no shame in seeking professional help . A financial planner can assist you in developing a a budgeting, that works for you and offer advice on how to best meet your financial goals.
In addition to these 10 steps, you can cut costs and save money by:
Reducing Utility Costs:
Save on utility bills by being mindful of energy usage. Turn off lights and electronics when not in use, adjust thermostat settings, and consider energy-efficient appliances.
Shopping Smart:
Look for sales, discounts, and use coupons when shopping for groceries and other essentials. Buying in bulk for non-perishable items can also save money in the long run.
Cancelling Unused Subscriptions:
Review your subscriptions and cancel any accounts that you no longer use or find unnecessary. This includes streaming services, magazines, or gym memberships.
Negotiating Bills:
Contact service providers (e.g., internet, cable, insurance) to negotiate better rates or explore alternative providers for better deals.
Avoiding Impulse Purchases:
Before making a purchase, take some time to think about whether it's a necessary expense or just an impulse buy. Delaying non-essential purchases can help you make more thoughtful decisions.
Using Cash:
Consider using cash instead of credit cards for discretionary spending. Physically seeing money leaving your wallet can make you more conscious of your own spending habits.
Finding Free or Low-Cost Entertainment:
Seek out free community events, use public parks, borrow books from the library, create, or engage in affordable hobbies to entertain yourself without overspending.
Conclusion
Budgeting and saving does not have to be difficult or tedious; these ten easy steps will help to greatly simplify the process and make it easier for you to stick to a budget that works for you and meets all of your financial goals.
Now that you're a whiz at budgeting, why not keep even more money in your pocket by switching to PureTalk!
Posted 9 months ago