With the economy in the toilet, it’s imperative for us to start saving. Some say there’s fear mongering towards a recession, and others say it won’t happen for another few years. But either way, it’s necessary to be prepared. I’ve prepared a short list to find some easy ways to start budgeting. If you follow my blog, I’ll also be posting more about different methods on side hustles and other ways to get some quick money.
- Prioritize Needs Instead Of Wants: When creating a budget, prioritizing your needs over your wants is absolutely essential. Start by listing your fixed expenses, such as rent or mortgage payments, utilities, groceries, and transportation. These are the needs – the expenses required for basic living. Once you’ve covered your needs, allocate a portion of your budget for discretionary spending on wants like dining out or entertainment. By focusing on needs first, you ensure that your essential expenses are covered before indulging in non-essential purchases.
- Emergency Fund is Non-Negotiable: One of the most critical aspects of budgeting is building an emergency fund. Unexpected expenses can arise at any time, such as medical bills, car repairs, or home maintenance. Aim to save at least three to six months’ worth of living expenses in an easily accessible savings account. This fund acts as a financial safety net, preventing you from going into debt when unexpected costs pop up. One tip I have learned from Dave Ramsey is before anything, try to save your first $1000. Make it a priority in your budget to contribute regularly to your emergency fund until you reach your target amount.
- Set Specific Goals: Budgeting becomes more effective when you have clear financial goals in mind. Whether it’s saving for a vacation, paying off student loans, or buying a home, having specific objectives can help you stay motivated and on track. Break down your long-term goals into smaller, achievable milestones. Create a separate budget category for each goal and allocate funds toward them each month. Tracking your progress toward these goals can be a source of motivation and satisfaction, making it easier to stick to your budget.
By following these three budgeting tips, you can take control of your finances, build a safety net, and work towards your financial aspirations, all while maintaining a balanced and realistic budget.
I’ve also curated a few budget planners that I think are top of the line. I have used several of these in the past and they have helped tremendously.