BUDGETING 101: ABCs of Maintaining a Budget

This is the second post in a two-part series on creating and maintaining a budget. If you missed the first part, check it out.

Automate as Many Things as Possible: Automating your bills and savings can help you control your spending. You don’t have to worry about paying bills late, just don’t overdraw!

Buy Only What You Need: It is easy to get suckered in by a good deal and buy something that you don’t need. Don’t let anything sit on the shelf!

Community: Buddy up with a friend who is also on a tight budget. Be intentional about encouraging and challenging one another. Think of fun and frugal things to do together!

Ditch the Cards and Use Cash: It is a lot easier to visualize how much you are spending if you are using cash rather than just swiping a card.

Envelope System: Take out cash for all of your expenses and put cash in specific envelopes. You can only spend what is in the envelope. For more information check out this link.

Flexibility: It’s important to be flexible since unexpected expenditures do come up.

Grow your Emergency Fund: When you are on a tight budget it can be difficult to set aside a large amount of money right away so continue growing your fund every month.

Habits: Look long and hard at your spending habits. Do you have any that are really wasting your money?

Interest on Loans: If you can begin paying the interest on your debt while you are still in school this will help you a lot in the long run.

Job: Do you have a hobby that could make you some money? Do you bake desserts or knit sweaters? Could you tutor someone?

Keep A Close Eye on Your Cash Flow: Just because you have a budget doesn’t mean that you shouldn’t look over all your transactions on a frequent basis.

Look on the Bright Side: It is really important to keep a positive attitude about budgeting. Budgeting should help you to focus on what you CAN afford rather than what you can’t.

Make Space for the Fun Stuff: Although your budget might require you to take some of your fun stuff down a notch, these activities should never be eliminated completely.

Never Borrow More than You Need: Only borrow what you need. Remember this is not “free money” you will have to pay it back some day.

Occasional Expenses: Don’t forget about Christmas, birthdays or taxes, make sure that you set money aside for these throughout the year so that they don’t break the bank.

Patience: Whether it’s your first time or your fiftieth time creating a budget, it takes time to adapt to a new system and control bad spending habits.

Quiz: Wonder how well your budget is working? Take this quick budget assessment quiz.

Reward Yourself: Rewards can help you to stay motivated even when you are feeling constrained. Some rewards might be a nice dinner out, concert tickets, vacation or dessert.

Shop Around: Be a conscious shopper. Consider buying used items instead of new.

Thirty Day List: This is a great way to determine if you really think it is worth it to buy a new computer, car, technological gadget, vacation, etc. Write down the item that you want and the date, if you still want it after 30 days then see how it fits into your budget.

Use Prepaid Cards: A modern update of the envelope system, get prepaid cards from the bank and use them for specific expenses. For more information check out this link.

Vision: It’s important to have a positive vision in mind (like being debt-free, giving more of your money away, or saving up for a large expense) that you can remember when your budget gets tight or you start feeling deprived.

Watch Your Household Costs: If you pay for your heat, consider turning the dial down a few degrees and putting on a sweater. If you pay for your electricity, make sure that you are turning off the lights before you leave the room.

X-amine Your Budget Regularly: Do you think that this budget still reflects your priorities? Did you over or under-estimate your budget in any categories? Is your budget realistic?

Your Savings Account: Treat your savings as a bill that has to be paid every month. Put it at the top of the list.

Zillions of Credit Cards: Cut down on the number of credit cards in your wallet so that you are not tempted to use them for extra expenses.

Join the Conversation. How do you maintain your budget?