Are there any words in the English language that can put you to sleep faster than budget?
Probably not. That being said, budgeting is an important skill to learn — one that can help you achieve your goals, financial or otherwise.
Luckily, budgeting doesn’t have to be a boring, painful experience. With a little help, you can easily balance your financial goals and your fun expenses.
Here’s where to start:
Establish your goals
First, let’s start with the fun part.
Take a few moments to sit down and figure out what your goals are. Do you want to save for retirement? Go back to school? Travel more? Go to next year’s big music festival? Spend more time with your family?
Once you’ve determined what your goals are — no matter how serious or frivolous they are — you should determine how much it will cost. Understanding what you want to do and how much money you need to do it will get you on the right track for balancing a budget. Which brings us to our next point.
Track your spending and make a budget
The best way to cut costs and put more money toward your savings is to take a good, hard look at what you’re making, what your spending and how to two compare. Create a spreadsheet, or keep a simple list, of every source of income, as well as what you spend each month. Once you’ve done that, you’ll want to look at your overall financial picture — including what you want your later years to look like.
When it comes to creating a budget, begin looking at what you can do to help achieve your goals a little faster. If you want to save for retirement, begin looking at 401(k) or IRA accounts. If one of your dreams is to invest in an RV that can take you and your family across the country, use an RV loan calculator to determine what you can afford, and when you can afford it.
You get the idea.
And, thankfully, technology can also help when it comes to budgeting and saving money. Mobile banking apps or third-party apps like You Need a Budget can help you keep track of your spending and reduce where possible.
Cancel memberships you don’t use anymore
This one might feel difficult at first, but evaluating all your monthly subscriptions and memberships could be an eye-opener for those looking to take control of their finances. Run back through at least six bank statements and look at each recurring cost, then ask yourself: Am I really using this?
If you work out at home more than the gym, go ahead and cancel your membership. If you’re watching one streaming service more than another one, cancel that subscription.
Your wallet will thank you for it, and you’ll have more money to put towards savings and nights out with friends.
Find extra cash
As you look at your set-in-stone financial responsibilities — i.e. rent, cell phones, etc. — and your fun expenses, it will become abundantly clear that more money could be useful. Even if you’re not in dire straits, a couple of extra bucks every month couldn’t hurt. Start by asking for an appropriate raise at work. Talk to your supervisor about the extra work you’ve done, the additional work you could take on and cost of living adjustments.
You can also turn your talents and hobbies into spare cash during your free time — you’d be surprised how quickly it adds up. Whether it’s selling your art or delivering food during your free time, these extra sources of income can go straight toward any goals you have.