And it’s such an easy one to take.
- Many people avoid budgeting because they think it’s boring or complicated.
- Sticking to a budget could be your ticket to boosting your savings and meeting other financial goals.
When you think about the ways you might enjoy yourself in the course of a weekend, sitting down to put together a budget may not come to mind. But the reality is that following a budget is one of the simplest steps you can take to better manage your money and meet your savings goals.
In a recent Primerica report, 31% of consumers said they don’t routinely stick to a budget. And if you’re part of that statistic, it’s really time to change your ways.
What can budgeting do for you?
When you don’t follow a budget, it’s hard to know where your money goes month after month — especially these days, what with inflation being rampant and everything costing more. But if you don’t put yourself on a budget, your finances might suffer. You could end up with costly credit card debt due to spending more than you can afford without realizing it. And you might have trouble adding to your savings account in the absence of having a better handle on your bills.
That’s why it pays to make the effort to budget. But to be clear, we’re not talking about devoting hours upon hours each week to tracking your spending.
Setting up a budget may not take you more than an hour or so. And from there, it’s a simple matter of checking in for a few minutes at the end of each month to see how you’re doing and making adjustments to your budget as necessary.
How to set up a budget for the first time
If you’re new to budgeting, the idea of creating one may be daunting. But it shouldn’t be. All you really need to do to budget is make a list of your various expenses and comb through recent bank and credit card statements to see how much each one commonly costs you.
Once you have that information mapped out, you can compare your total costs to your take-home pay. If the numbers don’t add up — meaning, you’re spending more than what you bring home, or you’re spending your entire paycheck so as to leave yourself with no opportunity to add to your savings, then you’ll know you need to cut some expenses, either partially or entirely.
As far as budgeting tools go, you have options. You could write down your budget on paper, maintain a spreadsheet, or utilize a budgeting app. In fact, the great thing about using an app is that you can link up to your bank and credit card accounts so that as you spend money daily, your purchases get allocated to different expense categories automatically.
Make budgeting a priority
Let’s be real. Budgeting may not be the most fun activity to engage in. But it’s certainly an important one. If you’ve yet to follow a budget, make it a priority to set one up. It’s an especially essential tool to have at a time when living costs are soaring and there doesn’t seem to be much relief in sight.
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