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    Five Steps to Achieving Budgeting Bliss

    Five Steps to Achieving Budgeting Bliss

    Five Steps to Achieving Budgeting Bliss

    OK, we admit that budgeting isn’t how most people enjoy spending their free time, but it’s a necessary part of adulting. And once you’ve mastered the art of the almighty budget, you’ll feel as if you’ve gained a superpower. Being able to know and control how much you spend on different parts of your life will lead to better prioritization and, ultimately, less stress. Getting started may seem daunting, but we’ve laid out a five-step plan for you to budget your monthly income and expenses. So without further adieu: 

    Step 1: Get Organized

    Finances Inline Organized 

    Create a personal goal before budgeting. Having an endgame will help you organize your budget right from the get-go. Invest more money into retirement, pay off debts, take your dream vacation, or fill up a bathtub with dollar bills and live the life of luxury! Whatever your goal is, use it to drive your budgeting for the coming month.

    Next: Use the right tools. Yes, we’re talking about creating a spreadsheet. But have no fear — even if you don’t have Microsoft Excel listed as a skill on your resume, you can still use technology to your advantage. Apps like Mint and Clarity make it easy to get a better picture of your finances. It’s all about having more transparency into your spending patterns day by day, week by week and month by month. If desktop is more your speed, kind strangers have already created useful budget templates for Google Sheets (a free online spreadsheet tool) so you can simply plug and play.

    Step 2: Budget Every Last Dollar

    Finances Inline Dollar

    By accounting for each dollar you earn and spend, you don’t leave any margin for error. Which isn’t to say you shouldn’t create a nice cushion for unknown expenses, but include that cushion in your budget. Life’s always better with a little wiggle room, so give yourself $100 buffer (or whatever you’re comfortable with) and account for that $100 as a line item in your expected expenses. If you end up not needing it, then pop it into your retirement, savings or take your sweetheart out on the town for a night. It’s always better to overplan and know where each dollar goes rather than wondering how it all disappears.

    Step 3: Anticipate Each Month Individually

    Finances Inline Calendar 

    It’s true. Much like snowflakes, each month has its own unique design and (spending) pattern. The obvious example is December, with its holiday spending and potential travel expenses to see family. But you should also take into account different bill cycles and big purchases. If you pay out your annual car insurance next month, that will put quite a dent in your “normal” spending. Or maybe Fido just destroyed your couch and a new one is right around the corner. Basically, have the foresight to expect these expenses and save up for them. 

    Pro tip: Even if you’ve accounted for next month’s expenses, expect the unexpected. If you’re able to, also create an “emergency fund” just in case someone breaks a bone or shatters a window out of the blue.

    Step 4: Review Your Spending

    Finances Inline Review 

    What went wrong or right last month? Really dig into your spending (and savings) to discover patterns that you’re either proud of or need to adjust. If you spent $600 on eating out last month, maybe you can deposit an extra $200 into savings right when you get your paycheck. That way you only have the option of spending $400 on restaurants. Identifying a problem is the only way you can begin to fix it. And If you’ve reviewed everything and it all seems to be in order, give yourself a much deserved pat on the back — your wallet thanks you for your service!

    Step 5: Create a Plan of Attack

    Finances Inline Plan

    You knew this was coming: cutting back! Yes, yes — it’s a lot harder to save money if you continue spending it all. But it’s important to keep budgeting for fun activities, otherwise your plan will never work. So after you’ve reviewed your spending (per step four), pick one to three categories you feel you can cut back on. Take a good hard look at how much you spend on new clothes, happy hours or any other extravagance you regularly enjoy. This doesn't mean you need to stop doing those things, just spend less money on them. 

    There you have it! A full-fledged guide to getting your budget in order and your expenses under control. Give it a shot and tell us all about it in the comments. What’s your monthly indulgence? Have you always been good about saving?