Budgeting is a complete nightmare and is mostly full of disappointment. We always tend to look at how much money we don’t have and wish we could just win the lottery. For some people, budgeting on a budget is very difficult because you first have to have money to budget. However, when you take a closer look at your priority spending vs your want spending it can get pretty ugly.
We as humans are born with this little voice in our heads that always say’s “I want this”, but, with the right direction you can accomplish miracles. There are a few little tricks you can do to help you get through the pain of budgeting.
Five Tips for Easy Budgeting
- Identify your monthly pay
- Identify needs vs. wants
- Identify due dates
- Round up and down method
- Save just a little
Identify Your Monthly Pay
If you are like most consumers now day’s, then you’re probably budgeting paycheck to paycheck. This may work for a little while, but you will be more likely to fall off more often than none. Some consumers get paid weekly, bi-weekly or monthly and the variations of pay dates can be extremely problematic. It is best practice to identify your monthly pay then divide by two. This will allow you to properly align yourself for bill due dates.
Identify Needs vs. Wants
Now, I completely understand the wants in life and as hard as it is for me to say, we have focus on what we need to survive first. This means writing down rent, , food, electricity, water bill, car, insurance, phone, clothing and gas. These items are all needs and these items are must never be negotiated when you budget. Everything else that is not on this list is a complete “nice to have’s” or wants. Yes, it’s hard to look at it that way but it is true.
Identify Due Dates
After you write down your needs and wants you will need to write beside these items the due dates when these bills are to be paid. Once you identify the due dates you will need to allocate portions of your paycheck to either pay all at once or set aside partial payments until you can make the full payment.
Round Up and Down Method
You will probably not like this at all but, if you give it a chance you may find that you actually love this. The science behind the Round Up and Down Method is very simple. When you get your paycheck always round down.
Example: Your paycheck is $1156.72 every two weeks. You will need to round down approximately $20 to $25 dollars from your pay amount.
This means that you will actually say you make $1130.00 every two weeks; this will give you a great start on easy budgeting.
The round up portion is for your monthly bills. Let’s say your car insurance is $132.00 a month, you will want to round up to $135.00 for this bill. Keep in mind that these amounts are just on paper to help you organize your budget. You will continue to pay $132.00 a month for your insurance.
Note: If you are not on average billing for your electricity call your electric company and tell them you want it.
Save Just a Little
I know this part is extremely hard but good habits will come out of it. Even if you just put back $10.00 a paycheck, this action will allow you to develop consistency. Budget your savings just as you would a regular monthly bill.
Now one thing to remember is when you start this type of budgeting you will notice that you actually have just a little bit more in your monthly budget. The reason for this is because of the Round Up and Down Method which is a great habit to form. Even if it’s as little as a $2.00 over budget on every bill you could end up with $20.00 extra from your needs budgeting. Remember that your wants will be the most difficult to take into consideration.
Remember, even if you don’t have a goal for budgeting always take note of these easy steps and you will be amazed at how much you can accomplish.
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