It can be hard to stay on top of your spending throughout the month—especially when unexpected expenses pop up or you’re invited to attend a number of social events—but there are a few simple things you can do to help stay on track. After all, when it comes to discretionary expenses, you’re in control! Here are five easy, practical budgeting tips that will help just about anyone reach their goals and achieve better financial health.
Track everything (yes, everything!)
Tracking your income and expenditures is one of the best ways to stay on budget (or find flaws in a too-ambitious budget you’ve created). There are a few ways you can do this, from using an old school spreadsheet (Google Sheets can be accessed from your phone or computer and shared with other household members) or by using a well-reviewed financial app like Mint or HoneyDue. Track everything in detail, compare your actual spending to your monthly budget, and make adjustments to your habits or spending plan as needed.
Automate your savings
One of the easiest and most effective ways to save money is to make it a part of your monthly budget and automate the bank transfer. Set up a weekly or monthly e-transfer from your everyday bank account to a designated savings account (ideally, one with low fees and a higher interest rate). Make an effort to leave this savings account untouched except for in response to planned spending or financial emergencies. Once you’ve set it up, you can all but forget about it—but when you need to dip into that rainy day fund, it will be there.
Limit grocery shopping to once per week
It can be difficult to stick to a grocery budget if you’re making multiple trips to the store throughout the week. An extra bag of chips here, some frozen meals, a few items from the counter near the cash register—sure, you went in for apples, but suddenly you’ve spent $50! To avoid this scenario, try meal planning and create a list of ingredients to shop for (ideally, you’ll use some ingredients in more than one meal, helping you spend less and avoid food waste). Stick to your list—or at least, use it as a guide while staying on budget—and make an effort to go grocery shopping on the same day each week. Once you get used to this routine, it will become second nature (and save you money).
Consistently review your budget
Your budget may be awesome now, but it won’t work forever. Ideally, a budget should be a living document that evolves along with your needs and goals. In order for your budget to keep working for you over the long-term and be an effective part of your financial plan, revisit it regularly and make adjustments as needed. Try making a calendar reminder to review your budget every six months, plus anytime you have a significant change in income or expenses. Not only will this help you keep on top of your budget, it will help build confidence in your spending habits and financial decision-making.
Pause before making discretionary purchases
Impulse shopping can be a real budget killer, but there are easy ways to slow down your spending. When making discretionary purchases, make a note of what you want to buy and then wait several days before revisiting the list. If you still want to make those purchases later in the week (and they work within your budget), go for it—but oftentimes, you’ll find that the urge has passed and you’re just fine leaving that online shopping cart empty. Apply this strategy to larger discretionary purchases as well as everyday expenses—it’s a great way to be more intentional with your money and reduce spontaneous spending.
If you have questions about your budget, financial plan or investment goals, please contact us. We’d be pleased to answer your questions and work with you to improve your financial health.