Tips to Make Budgeting Easier

MSN Money has a guide to budgeting that offers various thoughts on how to budget, why to budget, etc. The part I liked the best was the list of tips to make budgeting easier. Here's what they had to offer:

• Write it down. If you don't, you probably won't stick to it.
• When good fortune comes your way in the form of an "extra" paycheck or a bonus, pay an annual premium, make an additional mortgage payment or use it for seasonal extras, such as summer vacation costs or Christmas presents. (See "What to do with 'extra' paychecks.")
• If you can't spend less, earn more.
• Get into the habit of thinking ahead. If you know your situation is going to change -- a new baby, new winter clothes, a new job -- plan for it and try to pay cash.
• Remember, budgeting is the means, not the end. Keep spending "mistakes" in perspective.
• As your income climbs, don't splurge until you're sure you're staying ahead of inflation. A good budget grows with you, so it's worth re-evaluating your budget every year.

Ok, it's not rocket science, but neither is budgeting (budgeting is about as basic as it gets in personal finance.)

I think I'll write a post later this week detailing how we budget, but for now let me say all you need is a simple, written budget that you live by and check/adjust from time to time. If you do this, you'll be far ahead of most others and well on your way to a solid financial base.

For more thoughts on budgeting, see these posts:

• Budgeting Part 1: Creating a Family Budget

• Why do Millionaires have Budgets?

• Three Ways to Track Your Spending

And for those of you looking for budgeting help, you may want to consider this post: The Benefits of You Need a Budget.

Comments

[FS]

Sometimes it is easier to think of a budget as a "spending plan" for you and your family. While some might dismiss as a mind-game, I've found both with our own finances and coaching others that this subtile change can make a big difference.

[Anitra]

Having a plan for "extra" money before you receive it helps a lot. In the past, we had a budget based on our regular pay, and we never factored in any bonuses or other "extra" money (gifts, etc). We would usually put a little away, but blow most of it.

This month, we get an "extra" paycheck from my job (three paydays instead of two), and my husband gets a year-end bonus and a referral bonus from his job. We estimated how much money this would give us before the month began, and it is almost all going towards one loan - which will now be paid off by May, since we focused all the additional money on it. We never would have managed this before.