Budgeting advice is often cut and dry. Write out all your expenses and then pay them on time – oh, and don’t overspend in any category but stick to that written plan!
That’s easier said than done. However, with a shade more advice it really can be super easy to keep to your budget. Here are my tips to improve your budgeting game.
Focus on Cash Flow
Don’t think about your expenses strictly from a monthly perspective, but rather from a pay-period perspective. Decide at the start of the month how you’ll spend money after each paycheck. If you get paid weekly, you should have a weekly plan covering which check pays for rent, which pays utilities, which pays car insurance, etc. If you get paid bi-weekly, it’s the same idea, but with more bills being paid. For example, we pay all of our utilities out of the first paycheck each month, and we only send to savings out of the second paycheck.
Modify Due Dates
Many people choose which paycheck to use for specific bills by looking at the bill’s due date. What do you do if all your bills are due during the first half of the month? This can create a tight money situation with little breathing room. The answer is simple! Contact the provider and ask for a due date modification. You can’t go asking every month, but most companies (utilities and others) will work with you if you kindly submit your request. They do want to keep you a happy paying customer after all.
Give Yourself Fun Money
When you are in a bad financial position, fear of the situation and a sense of urgency takes hold. This leads to moments of “gazelle intensity” as Dave Ramsey calls it. I fully support gazelle intensity to get yourself out of a dire strait and for sprints toward specific goals. However, it is not sustainable forever. People need some discretionary spending. A small bit of freedom that encourages us along the road to financial freedom. I suggest you work in some fun money (as I call it) – even just $20 a pay period is enough for a simple treat to keep you motivated along the way.
Use Cash Envelopes
I know, I know, few people work in cash nowadays, but hear me out. One way that many people get into trouble is that they mean to loosen the reins on spending a little but end up loosening the reins a lot! Sometimes it’s due to a lack of impulse control, but frequently it’s because they lose track of what’s already been spent. This happens easily unless you’re reconciling your account daily. Using cash for budget line items that are spent in smaller amounts throughout the pay period gives you a physical reminder and limitation to what you can spend. When the cash is gone, you’re done. This approach is great for groceries, eating out, convenience errands, clothing, and more.
There you have it! For any of you struggling, I promise you will have much less budgeting heartache if you sincerely apply these four tips. Give them try, and then leave a comment and let me know how it went.