While most of us know the budgeting and observing spending process is incredibly important that does not make it easier to stick with the process. Budgeting can be overwhelming and time-consuming, especially when you are first trying to make it into a habit. To help make it easier to keep budgeting long term, here are a few strategies myself and others have found helpful.
- Start Small
If creating a comprehensive budget seems like too much, break it into smaller chunks. Start by fully budgeting one or two categories for a month. What spending category do you really want to work on or think you are most likely to overspend in? For many people (including myself), this category tends to be groceries/ eating out. If I were to only focus on my eating out category, I would allot a certain amount of money to eating out. Each time I ate out, I would write the date, cost and place down. As the month went on I would adjust the budget or my behavior as needed. At the month’s, I would look back and see how I did, making any needed adjustments for the next month. As time goes on I would add more categories until I was budgeting all of my income. This is an example of one of the many ways to start small and work your way up.
- Schedule Time to Follow Up
Most people find it overwhelming to track expenses each time they occur. One way to make logging expenses and reviewing spending habits easier, is to schedule a time at least once week to do it all at once. I have a friend who dedicates 30 minutes every Sunday to write down all his expenses from the week and check-in with his budget. Was he on track or did he need to make modifications? Simply scheduling a time on his calendar has made budgeting so much easier for him.
- Automate as Much as Possible
One of the really nice perks of today’s technology is that you no longer have to manually input your spending, if you do not want to. There are free apps like Intuit’s Mint and NerdWallet that allow you to connect all of your accounts and they will track your expenses for you. Both will also send you notifications about your spending. A nice feature Mint has is that you can set up alerts that will notify you if you are over-budget, spending unusually or remind you of upcoming bills. The one caveat with this software is you may have to recategorize expenses later and add cash purchases, but automating the process makes it a lot less overwhelming. Additionally, you can have your budget and track spending all in one place through apps like Mint. Be aware, some apps like Mint are free while others may cost.
- Be Realistic
Finally it is not easy, but you have to be realistic. Do you really think it is realistic to increase your savings from $0 to $500 a month when you make $450 a month and do not have the current capacity to bring more income in? I know it is not realistic for me. You need to give yourself time to adjust to the new habit you would like to build and stop shaming yourself for not being where you think you should be. Shame will not help you get where you want to be. Take it from someone who knows firsthand, it will just make it harder to get there and increase your chances of giving up on your goal.
If you want help with the budgeting questions or have additional questions about other topics, remember Powercat Financial is available for online or phone financial counseling sessions. They may be requested via our website link at www.k-state.edu/powercatfinancial.
Links: www.mint.com, https://www.nerdwallet.com/l/app
Anabelle Sanko
Peer Counselor II
Powercat Financial
www.k-state.edu/powercatfinancial
