Sticking to a budget is something many people strive to do, but few can actually do it consistently. Budgeting is not as easy as it sounds.
It’s hard to budget for things like gas when the price per gallon keeps going up. Keeping to a budget is difficult when certain bills, like water, gas and electricity, change every month. Then there are those pesky unexpected expenses that always seem to pop up.
Like with any other skill, staying on budget is something that takes time and practice to master. Here are 7 tips for sticking to your monthly budget.
Give Yourself An Allowance
Giving yourself a cash-only allowance for all of the “extra” things you want is a great way to eliminate excess spending. Remember that once the money is gone, it’s gone, so that means no more lattes or other splurge items.
It’s easy to get a coffee or go out for lunch when you’re just swiping a card and not thinking about it. Instead of paying with plastic, take out a cash allowance each month to keep your spending under control.
Have the other members of your family participate in this exercise too by giving each person a monthly cash allowance.
Pay Your Savings Bill First
Treat your savings account as a bill and pay it first. Having an emergency savings account is important for all those expenses you don’t expect, like an auto accident or an injury.
If you have direct deposit through your job, have a portion of your paycheck put directly into your savings account so you’re never tempted to use it rather than save it.
Plan Your Meals And Shop Ahead
Eating out and buying groceries are two of the largest spending categories in most families’ budgets. Many people grab a pizza or fast food when they forget to take something out for dinner or can’t think of anything to cook.
Instead of eating out frequently, plan your meals in advance and shop weekly. This will help you avoid running out of food so you won’t have to do extra shopping mid-week.
Another advantage of shopping ahead is if you use the sales flyer to plan your meals you can save a bundle by shopping the sales. Using these deals and coupons can help keep your food budget in check.
Know The Prices Of Your Groceries
Make a list (a mental list is fine) of the items you regularly buy and their price. Fruits and vegetables are seasonal, so if you notice that mangoes, apples or avocados cost $0.50 in one season and $1.50 in another, plan accordingly.
Other items are seasonal too. TV’s are always cheaper right before the Super Bowl or after Black Friday. Grills are cheaper in the summer. Shop for clothing during Labor Day sales or during back-to-school-specials.
Many stores lower prices on items seasonally or on a weekly schedule, so knowing when something will be at the rock bottom price will help you plan your purchases better.
Adjust Your Tax Withholding
If your budget is too big for the amount of money you’re bringing in, take a look at your tax withholding to ease that burden a bit. Sure, having a huge tax refund in April is fun, but at the same time you’ve essentially given the government an interest-free loan all year.
Instead of lending the government the money, keep it for your monthly needs or put it in your own savings account so you can at least earn interest on it.
Identify And Eliminate Expensive Habits
Whether it’s smoking, drinking or even a Netflix subscription that isn’t being used, eliminating your most expensive habits can help you lead a better life while putting more cash into your monthly budget.
Addicted to coffee? Switch from Starbucks to McDonalds McCafe. Love watching TV? Cancel cable and get a Hulu subscription. Look at your lifestyle and identify places where you can cut back on spending to help with your finances.
Utilize Smartphone Apps
Use software or apps to help you keep track of your monthly budget. There are numerous free apps and online software packages that can help you track all of your spending and accounts. There’s Mint, Level Money and You Need A Budget.
These smartphone apps will give you an overview of where you’re spending money and help you identify places you can save. Some also alert you when your budget for a particular category is almost exhausted.