6 Budgeting Tips to Include in Your Everyday Life

The dreaded word–budgeting. Who wants to do that? Unfortunately, budgeting has gotten a bad reputation for being one of the most dreaded tasks a person can do. That is because you have to think of the million expenses that you can pop up, and it is natural to forget to budget a few things because some things happen unexpectedly.

However, budgeting comes with many benefits. It’s a great skill to master to become better at personal finance and to enjoy your life within your means. It is even great if you want to save money and invest it. It doesn’t have to be viewed as a task for conservative people who won’t live their life to its fullest before they’re on a budget, on the contrary, budgeting allows you to do the things you want without worrying about spending too much because you are perfectly aware of your costs vs. revenues.

The question is: “Why is budgeting beneficial? What does it add to my life?”

It is certainly tempting to wing your budget every paycheck until it isn’t. Until you find yourself facing an expense that you weren’t ready for or have spent too much that you need to go on an unrealistic budget until your next paycheck–that’s when you will realize that you should have budgeted from the beginning.

It gives you a clear picture of where your money goes, and to rethink your priorities. Maybe you’ll find out that you’re spending too much on takeout, and you’d rather save this amount for another thing you prioritize more. It makes you think about alternative options and compare them, like home warranty vs home insurance.

Here are some tips to help you with budgeting.

1. Make a zero-based budget

A zero-based budget is as its name implies–you go from X to zero. That doesn’t mean that you will be broke by the end of the month because your leisure expenses, treats, savings are also included in your budget, not only the necessities. It definitely won’t mean that you have $0 in your bank account by the end of the month, it simply means that will allocate each dollar. Reaching zero means that your revenues minus your expenses are zero by the end of the month.

2. Acknowledge that not every month will be the same

Of course, each month is different because life is not the same every day. Some months you will have to pay for seasonal expenses such as Christmas gifts, vacations, school supplies if you have kids or are going to school yourself, weddings, birthdays, or your car maintenance. Regardless of these expenses, make sure that you take these irregular expenses into consideration when budgeting for the month.

3. Start with the necessities

There are some things in our lives that we have to prioritize, collectively, like food, utilities, housing, and transportation costs. These are the most important expenses in your life. Once these are included in your budget, you can start allocating money for other things depending on your priorities. For some people, a monthly nail appointment is more important than a monthly movie ticket.

4. Don’t forget to pay off your debt if you have any

There’s no doubt that debt should be included in your budget, and not winging it off just because you manage to every month. You want to try to pay off as much debt as possible to be able to enjoy your full income more freely.

5. Leave room for adjustments

Understanding that some months will be tighter than others is important, and it doesn’t mean that you can’t enjoy a good life because you can always adjust later. So, if you have a commitment for this month and need to live on a tighter budget, try going out less, doing your hair at home instead of with a professional, and looking for promotions in grocery stores. You can always change that later.

6. Have a buffer for unexpected expenses

There are many unexpected expenses that could arise all of a sudden. So, having some money put aside for these kinds of expenses is recommended. You can even budget this under “unexpected expenses” in your budgeting sheet. This way, when something like this comes up you don’t have to give up something else that it important, especially if you are already on a tight budget during that month. If you find that a certain ‘irregular’ expense keeps appearing in your budget every month, you can consider setting a permanent category for it later on.