There was a time in my life when I was so budget challenged that knowing how to budget was something that just wasn’t on my radar. Sure, I would glance at budget tips when I saw them, but I simply didn’t care much to actually take the time to learn how to budget. It wasn’t until my situation had drastically changed that I was ready.
I wish I could say that I learned how to budget out of a desire to better my financial situation. I can’t though.
I learned how to budget because I suddenly found my 5-year old and myself in a homeless shelter. Now we weren’t homeless because of mismanaging our money, but I was 28-years old and had no idea how to take care of myself.
Easy to Follow Budget Tips
It took a full two years before I was really good at budgeting my money. Unfortunately, learning how to budget your money isn’t something that happens overnight.
It requires a lot of trial and error.
It requires a lot of failure on your part.
It requires a lot of grace and forgiveness.
How to Create a Budget
Of course, you need a budget to learn how to budget. If you don’t have one, now is the perfect time to create one.
To put it as simply as possible, creating a budget is mostly just totaling your income and your expenses each week or month to make sure you can cover everything.
How to Budget Your Money
If you’re budget challenged like I used to be, it’s best to simplify things as much as possible. These nine budget tips are the simplest ways I could think of to explain everything you need to do.
Follow them and with a bit of hard work, you will end up with a far better financial situation than you’ve ever had.
Know your current financial situation
There aren’t enough budget tips in the world to help you learn how to budget your money if you don’t know where you stand with your money.
If you haven’t done a financial audit, now is the time. If you are sitting pretty, great. If you find yourself living paycheck to paycheck, that’s not so great. Either way, you can’t move on until you know where you – and your dollars – stand.
One thing you’ll want to do when you’re trying to figure out exactly where your budget stands is to track every dime you spend.
I bought an account ledger book like THIS one and it was one of the best decisions I had ever made for keeping myself and our finances organized. If that idea doesn’t set well with you, consider budget printables like THESE or THESE.
Have a budget that works for you
Once you know where you stand, take the time to either create a new budget or to update your budget.
As I said earlier, total up your expenses and your income. Assign your income to your expenses. If you have left overs, consider them to be savings.
If you don’t have enough income to cover your expenses, you’ll need to look at ways to make extra income.
Two of my favorites are InstaGC and Swagbucks. When you sign up for an InstaGC account, you can complete surveys and offers to earn instant cash and gift cards.
When you sign up for a Swagbucks account, you’ll have the chance to search the web, complete surveys, play games and more for points. Trade those points in for Paypal cash.
I’ve been a member of both for years and they’re still my biggest earners for extra money each month!
Have an emergency fund
One of the most common budget tips you’ll hear is to have an emergency fund. While most would tell you to create a baby emergency fund of $1,000, I won’t.
I think your emergency fund needs to be exactly that; a fund that is large enough to cover emergencies.
To be frank, $1,000 would not cover very many emergencies. I don’t mean you shouldn’t save that $1,000, but for an emergency fund, you should do your best to cover 3-6 months of your total expenses.
That way, when things go wrong; you’re able to make them right.
Use sinking funds to cover upcoming expenses
Have you ever heard the term “sinking funds?” If not, this is probably the best budget tip you’ll pick up from this post.
We all have large expenses that pop up every now and then. Car repair, property taxes and holidays are just a few examples.
Instead of having to worry about how to budget your money in a single month to cover those expenses, divide them into monthly payments you make to yourself and save for them over the months to come.
Example of Sinking Funds
If your property taxes are $2,000 each year and you have 12 months until they are due, you would save $166.66 each month until they’re due. Then, when the bill comes up, you have the money you need without hurting your family budget.
Know the difference between want vs need
One of the biggest issues that I see a lot of my readers have is that they have a hard time know the difference between want vs need or even if they do know; they have a hard time sticking to needs only.
If you need something to stay alive, to work or to function daily – it is a true need. These include your home, food, basic clothing and transportation to work.
Anything else – is a want. These include vacations, extra curricular activities and so on.
If you’re having issues with you budget, you do not have room for wants. It is as simple as that.
Always be working save money
In my book, also called Six Dollar Family, I make the comment that living frugally is a lifestyle. In other words, it isn’t something that you pick up today and put back down when your budget is flush.
Instead, follow this budget tip and budget your money – every month – as if you were trying to save money.
In addition to the way you budget, always be doing what you can to save money. This means following as many frugal living tips as you can and making sure you aren’t getting caught up in money myths that most people believe.
The more you teach yourself to save money, the better off your money will be in the long run.
Work to manage your debt
Debt can be crushing to your journey of learning how to budget your money. It can crush your budget, your savings and even your weekly paycheck if it gets bad enough.
Instead of letting your debt get out of control, keep it manageable. Work to pay off anything that is currently causing an issue quickly. From there, work to pay your debts off smallest to largest.
Oh and while you’re trying to keep things manageable? Don’t take on any new debt. Doing so would just defeat the entire purpose of these budget tips.
Keep your credit score in good shape
I am not one of those frugal bloggers who will tell you that you don’t need a good credit score.
In fact, I will tell you the opposite in this next budget tip. You do in fact need a credit score in today’s world and you need to keep it in good shape.
Debt you are responsible with and for is not a bad thing. Irresponsible debt that you allow to get out of hand is.
Credit scores in today’s world are used for so much more than getting more credit. Housing situations, job offers and more can all take them into account. If your score is bad, you could find yourself in a bad situation.
Instead of not worrying about it, use places such as Credit Sesame to get your credit score and credit report for free. Places such as Self Lender can help you raise a bad credit score and save money at the same time.
You can check out Credit Sesame for free right HERE or Self Lender right HERE. You can also read my Self Lender review and what it did for my own credit score HERE.
Take the time to build wealth
Finally, the last and for some – the most important of this budget tips is to take the time to build wealth when you can.
Once you have an emergency fund that could handle 3-6 months worth of your expenses, once your debt is managed and once you have a good credit score for when you need it, take your money and grow it.
Whether you choose to learn to invest, whether you choose to put your money into a money market account or whether you simply save it under the mattress, don’t leave it just sit.
Money that is sitting does you no good. Money that is growing will provide for not only your family but potentially their family as well.
If you enjoyed this post, you may also like these:
- My Favorite Money Saving Tools and Money Making Tools
- “I Don’t Make Enough Money to Survive” – What to Do When You’re Struggling to Make Ends Meet Financially
- How to Live in a Hotel {and Why You Should Try Full-Time Hotel Living}
- 21 Budget Categories and Forgotten Expenses You Might Be Overlooking
- 53 Frugal Living Tips from The Great Depression
- 40+ Tried & True Ways to Earn Free Amazon Gift Cards
- 17 Foods that Stretch A Long Way for Cheap Meal Ideas
When you do your budget, do you use these budget tips or do you use other tips? I’m curious to know what works for you and what doesn’t! Leave me a comment and let’s chat!
