Sticking to your budget can be challenging. As a reforming, free-spirit spender – trust me, I know! With so many 1-click online buying options these days, spending has never been easier. Most purchases are made by debit or credit card. Debit cards and credit cards encourage us to spend money faster than ever! Laziness and exhaustion call to us from the drive-thru and delivery apps. Not to mention our personal vices (coffee, clothes, etc.) tempting us to spend, spend, spend!
Today’s tips are for at free-spirit spenders. But, they apply to anyone wanting to tighten up their budget! Today, we will discuss how to:
- Tell every dollar where to go
- Set aside spending money
- Buy with cash
- Procrastinate purchasing
- Eat healthy, stay within budget
- Manage your subscriptions
- Cut costs!
Budget Boss Bundle
Before we get started, now is a great time to download my completely FREE Budget Boss Bundle! Are you tired of disorganization and frustration with your finances? Are you overwhelmed because you don’t know where to start?
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Here is what you get:
- Net worth calculator template
- Monthly budget template
- Savings goals worksheet
- Recurring expenses tracker
- Financial action plan worksheet
- Cost-cutting workbook
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Okay, back to the tips!
Tell Every Dollar Where to Go
Managing money is awesome because it will do what you tell it to do. But the problem is, we often don’t tell it to do anything! Budgeting does not mean never spending money on anything. Following a budget means you are telling your money where to go and what to do!
In other words, to budget is to spend money intentionally. Making purchases within your budget should feel good. That’s because you know you are buying something you planned to buy.
You shouldn’t have leftover money when planning your budget. Tell EVERY dollar where to go. Whether you want to spend it or save it, don’t let any of your hard-earned cash slip through the cracks. Every dollar should have a purpose. Money with no purpose is usually wasted. It’s easy to do!
Allocate Spending Money into Your Budget
Branching off of the last tip, it’s essential to set aside spending money for yourself. When you are realistic with your budget, it’s easier to follow it! If you create a super tight budget with no spending money and no wiggle room, you are setting yourself up to fail.
Practice staying within a budget first. After you’ve made a habit of tracking your spending and sticking to it, you can start adjusting and cutting costs!
As much as I find the cash system annoying to use, I can’t deny that it works! People who overspend tend to make purchases with a debit card or credit card. I know I almost always reach for my debit card before cash! But cash spending is better for a few reasons.
Cash is harder to spend because it’s physical. When you physically hand over $20 bills to the cashier, you feel the loss of that money more than you do when you swipe. It’s easier to see that when cash is gone – it’s gone! Card spending disconnects us from the value of a dollar. But using cash reminds us what our money is worth. Using cash is a great for sticking to your budget!
To start a cash system, make your budget for the month and make an envelope for each spending category. Go to the bank and withdraw the amount of cash you need for each envelope.
For example, your grocery budget is $200, your spending budget is $50, and your gas budget is $60. You would withdraw $310 and allocate the correct amount to each envelope. Then, anytime you make a purchase for one of those categories, you pay with cash from your envelope. There are many resources for starting a cash envelope system, but this is the basic gist.
Procrastinate Your Purchase
Another excellent tip for sticking to your budget is to break the habit of 1-click buying. Any time you shop online, add the item to your cart rather than hit “buy with 1-click.” Don’t check out on the same day. Put it aside to review the next day, and you’ll be surprised at the number of items you’ll reconsider buying! You can move any product to a “save for later” list, so it’s always there for when you really want it!
If you need to make a purchase at a brick-and-mortar store, try to put off your trip as long as possible. Avoid “stopping by” Target on the way home from work. Don’t make unplanned trips, period! You will always spend more money then you intended. Wait until your wants become needs to make the trip.
Eat Healthy & Stick to Your Budget
This tip is an excellent opportunity to kill two birds with one stone! Eating healthy and sticking to your budget go hand in hand for several reasons. Here are a few:
- Most healthy eating plans discourage eating out. Nutrition plans like Whole30 or Paleo have few fast food options – so no more eating out for lunch every day!
- You spend less money when you prepare your meals at home.
- By portioning out your meals, you will spend less, eat healthier, and feel better all around!
- Eating healthier is a great excuse for sticking to your budget. When friends invite you out, you can use a positive reason instead of a negative one. (“So… I’m doing Whole30 this month. Do you want to come over and hang out instead?” versus “I can’t go. I don’t have the money for that right now.”)
Eating healthy and sticking to your budget are both great habits to develop in your 20s and 30s. Putting them together just makes sense!
Manage Your Subscriptions
I don’t know about you, but pesky subscriptions get me every time! You signed up for a free trial of a streaming service and forgot to cancel. You downloaded a new fitness app that you didn’t realize you’re still paying for. The list goes on!
Subscriptions are easy to forget about unless you’re super vigilant. Millions of people don’t realize how many monthly subscription they are paying for. There are even entire companies to help them manage their subscriptions!
Luckily, handy apps like Truebill exist. These apps identify every recurring expense debited to any of your cards or accounts. Truebill makes it simpler than ever to manage and cancel your subscriptions. In some cases, Truebill can even cancel your subscriptions! Many apps offer similar services. Stick to your budget by finding one that works for you!
You can also set alarms on your phone to remind you when you cancel your free trial of any service, so you don’t forget!
Analyze Spending and Cut Costs
Also, it’s important to analyze all your recurring expenses to see where you can cut spending. Truebill is also great for seeing where you are spending the most money. (If I overspend, it’s usually on food!)
You can also try using a cost-cutting worksheet to get up close and personal with the numbers. Track patterns and identify your unnecessary spending habits. It’s tempting to let an app do all the work. But, it will be more educational and useful for you to analyze your own spending.
Stick to Your Budget, Live within Your Means
Living within your means is the biggest factor in building wealth! People who live within their means save more money and reach their financial goals. Sticking to your budget is hard work, but it’s a habit that you can build – just like anything else. It takes practice and discipline, but the payoff is worth it!