4 Steps to a Better Budget at Any Age


Whether you’re 21 or 51, sometimes the word budget connotes a cringe-worthy adult chore that seems like the opposite of what you want to be doing – living life to its fullest.

Budgeting may feel like someone told you to put your pocketbook on a diet and suddenly all you can think about are the boundaries and limitations you’ll be setting for yourself. Suddenly it feels claustrophobic and there are all these things you can’t do. But a budget isn’t about what you can’t do, it’s about making sure you can do what you want to do. Think of a moment when you wanted to do something but couldn’t afford it. Maybe it was passing on front row tickets to your favorite band’s concert. Maybe it was turning down a week in Tuscany with your friend and her family because the plane ticket was too expensive. Whatever it is, we’ve all had those moments. Now think of all the ways you could have made those moments happen if you had planned for them. A budget is a tool that helps you live your life the way that you want to and without regret. Budgeting lays out the details of your daily, weekly, and monthly spending so that you can put together the bigger picture. Regardless of how the idea of budgeting makes you feel, try these four basic budgeting steps to get yourself in the right frame of mind to make your goals a reality:

  1. Visualize your goals: Start by focusing on the positive–the desired payoff. Choose three goals to start with and a date that you want to reach them by. Perhaps you want to pay off your student loan debt, plan an extended international vacation, or purchase a home. Whatever your goals are, make sure to prioritize them both mentally and visually. Consider writing them down on a sticky note and placing it in your wallet and on your computer monitor to hinder you from impulse purchases. From here you’re going to work your way backward by estimating how much you need to save each month, week, or day in order to reach that goal.
  2. Track your money: If you don’t know where your money is going, it’s awfully hard to know how much you need to allot for necessities and what areas you can afford to cut back from. Thankfully, handy apps like Quicken, Mint, and YNAB (You Need A Budget) make it easy to start tracking your spending. Be happy we’re well past keeping handwritten ledgers and shoving receipts into shoe boxes. Leverage these tools or similar ones to help you regain control of your hard earned money and keep yourself accountable. Many of these options will categorize your spending and notify you when you’ve overspent in a specific category.
  3. Change up your perspective on spending: It’s not about whether you can spend the $5 every day on a cup of coffee; it’s about whether you want to. Once you’ve zeroed in on your goals and realize where you have been spending unnecessarily, it’s time to put your budget into action. Do this by checking in with yourself before sliding your credit card or handing over the cash. Do you need this? Do you have to have it? It’s also helpful to ask yourself if it’s worth it. Yes, you may really want it but how much time and money will this set your goals back? The adage, time is money, comes to mind more often when you are earning money rather than spending it. But realizing that you’ve already spent time earning that money and that you will need to spend even more time earning it back, is often a refreshing perspective at the cash register or before you click that order button. Both time and money are finite. Spend them wisely.
  4. Being prepared keeps you positive: Clearly not all spending is avoidable and emergencies often arise in the midst of your journey. While setbacks and unexpected expenses are frustrating, being prepared for life’s what-ifs can help you stay positive and regain focus on your desired path. To do this, set up a separate bank account as your emergency relief fund. Deposit a lump sum and then weekly or monthly deposit a portion of your savings into the emergency fund to continue to build your safety net. If you don’t have a lump sum to get you started, you can still build one by putting in a set amount each week. Instead of eating out an extra meal each week, auto-deposit $20+ into your emergency fund. If you find yourself facing an unexpected setback, you’ll be ready and won’t miss a beat as you strive toward your goals.

What’s great about these steps is that they are habit forming. The more you commit to your goals, the easier and more natural it becomes to think twice about your spending. Refocusing your mind on reaching your goals rather than participating in distracted spending also frees up mental space and eases stress when times are tougher. By making your dollar count, you have more freedom to take on the activities that will uniquely satisfy you. The earlier you put these into practice, the sooner you’ll reap the benefits.

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