Navigation

5 Easy Steps to Not Fail At Budgeting

This post may contain affiliate links. Please read my disclosure page for more info.

Do you struggle with maintaining a budget? Here are 5 steps that will help you succeed.

The following is a contribution from Kalen at Money Mini Blog. If you’d like to contribute to Frugal Rules, please contact us.

Imagine that you decide that it’s time to take control of your money, so you start a budget. You figure out which categories you want and set some amounts. Everything’s going great and then you forget to track a purchase or two, or three. Then your grocery bill goes way over budget and you end up needing to pull money out of your savings account.

You think you suck at budgeting. But here’s a little secret:

This happens every time someone starts a new budget and there are some things you can do to stay on track and actually make this budgeting thing work. Here are a few hints to help you stack on track with your budget.

#1 – Start With Tracking

 

I would bet that most budgets fail within the first month or two. It’s exciting at first, but after a few weeks it may start to get difficult. When you start a budget, the first few months are for tracking your expenses. If you haven’t lived on a budget before, you won’t really know how much you’re spending in each area. So here’s what you do:

  1. Write down every single purchase.
  2. At the end of the month, go over all your purchases and put them into categories (groceries, auto, entertainment, etc.)
  3. Do this for a few months to get an idea of how much you spend in each area, then create your budget.

It may take several months before you start building an accurate budget, but the first few months are crucial to its success.

#2 – Accept Failure

 

There will be months when you overspend and days when you forget to put purchases in your budget. That’s fine. Everybody does it. Accept failure as a learning experience, but use what you learn to make a more accurate budget.

Don’t give up. It takes years to perfect a budget, if that’s even possible. If you mess something up, keep going. It’s just one stumble and it’s going to happen. The most successful budgets have missed many times before they hit the mark.

#3 – Create a “Blow” Category

 

Before this gets weird, let me say: I’m not advocating drugs. I’m talking about creating a category for money that you’re free to “blow” on whatever you want each month. This fund is often the reason a healthy budget is well, healthy.

Figure out how much your “blow money” will be, based on your finances. It may only need to be $20/month or you may be able to get away with $50, $100 or more. Including this category is important to make sure you budget runs smoothly. It gives you the freedom the spend or “blow” some money on you. All of those spontaneous and random purchases for yourself fit into this category.

#4 – Make budgeting Easy

 

This is the most important point. Make your budget easy and accessible and do what works for you. There’s no need to create an in-depth spreadsheet in Excel, if you know you won’t use it. Figure out the best method for you.

It could be a paper budget, a spreadsheet, an app or budgeting software. If one doesn’t work well for your lifestyle, try another one. There is something out there that fits you and your budget. There are even free budget tools available online that you can use. The point is there are resources available that you can make work for you and your specific situation.

#5 – Make it Automatic

 

With all the budgeting software available today, it’s easy to automate your budget. You may prefer the control of a manual budget or you may just like typing in all those numbers. I know I may sound sarcastic, but I actually prefer doing it manually. Though I must admit: automation definitely makes things easier.

Struggling with maintaining a budget? Take these 5 steps to not fail at budgeting.

Automated budgeting software lets you link your banking and investment accounts with a program that then tracks all your expenses for you. Even though I track my budget manually, I still use Mint.com almost like a backup. I have all my finance accounts linked to my Mint account and I use it to look for trends in my spending and my progress on my financial goals. Another option and good alternative to Mint is Personal Capital and its offering of the ability to track your investments and credit card accounts as well.

There’s no more room for excuses.  Go out and create the budget that works for you.

 

What budgeting style works for you? What do you use to keep track of your budget? Share in the comments!

 

Additional resource: If you’re looking for a simple way to get on track with your finances, then check out my favorite new tool – Personal Capital. Completely free, it allows you to track your spending, monitor your bank and investment accounts and watch your net worth plus many other tools. 

Open your free Personal Capital account today!

 

Author Bio: Kalen Bruce is the founder and main writer at MoneyMiniBlog, where he writes short, sweet and simple articles about money and productivity.  Kalen lives a debt-free life with his wife and four children.  Get his free ebook here: Financial Freedom on a Full Schedule.

 

If you enjoyed this post, please consider subscribing to the RSS feed.
The following two tabs change content below.
I'm the founder of Frugal Rules, a Dad, husband and veteran of the financial services industry. I'm passionate about helping people learn from my mistakes so that they can enjoy the freedom that comes from living frugally. I'm also a freelance writer, and regularly contribute to GoBankingRates, Investopedia, Lending Tree and more. If you're wanting to learn how to monetize your blog, check out my blog coaching services to see how I can help you take your site to the next level.

Latest posts by John Schmoll (see all)

14 Comments

  • I’m just like you Kalen. I’m an excel junkie so I always have a manual budget with a cash flow projection out 3 years actually. But I use Mint.com because of the automation and syncing with my bank and credit cards. Speaking of which nearly everything goes on a credit card so it’s easy to track and dump into buckets in mint. My wife and I each get 150 a week as our “blow” money, everything else is budgeted. I think living within that weekly allowance you give yourself has been the key to us sticking with our budget and investing the excess.

  • I say it over and over again, but I always mean it! Tracking daily spending is so important. I just get so annoyed when the hubmeister can’t seem to remember to get receipts for what he buys or to write the number down. ARGH! I’m going to bookmark this article and go over it with him tonight. Maybe seeing it all typed out nicey nice like this will be the kick in the badoompa he needs! Thanks! 🙂

  • There’s so much power in tracking that I think people too often fail to realize until they’ve actually done it and experienced it themselves.

  • P.S. Derrick’s got some SERIOUS “Blow” money up there! Wow! 😛

    • I noticed that too! That would be nice! For now, my wife and I each have $100/month. We could have more, but for now we’re heavily focused on our investing.

    • It’s all relative. Once you’ve maxed out your 401k, are no longer allowed to contribute to a Roth, and are comfortable with your investing ability in a brokerage you have to put it somewhere to get to a zero budget. For us it’s about $300 a week play money (keep in mind this is money we use on gifts for our kids, family and charitable donations). We put that money weekly onto a pre-paid AMEX card, it’s very convenient.

  • Tracking is a huge key to success with many of my clients as far as keeping them on task for their goals. I also agree that automation is huge and the more that you allow technology to keep you on point, the more you will stay there. It sometimes takes a little while to get things set up; however, the long term benefits are definitely worth it.

    • Tracking is the only way I have found to get any kind of an idea on what my (or someone else’s) budget should look like.

      Automation is my best friend! I like to see my budget and manually put my expenses in, but everything is set up to happen automatically, so I’m really just monitoring. It’s great!

  • I like that you included recording your spending as the first step. If you aren’t recording your spending, it’s pointless to even try to budget.

  • I would add to make sticking to the budget a habit. Review it here and there, make sure you have that blow category (which actually sounds terrible – HA! Just realized that) and then constantly be revising and reviewing.

Leave a Reply

Your email address will not be published. Required fields are marked *