You’re ready to start a budget — awesome!
You’re probably feeling excited and ready to get your money in order. But here’s the thing: It’s super easy to give up on budgets. They can get complicated and require some maintenance.
So before creating your budget, take these simple steps to set yourself up for success:
1. Track Your Spending
Chris Zuppa/The Penny Hoarder
Sometimes it feels like each paycheck disappears into thin air. The money lands in your account, you revel in your balance for one day, then you pay your monthly bills.
That’s why it’s so important to track your spending. Before you even start a budget, you’ll want to get a clear idea of where all your money is going each month. There are plenty of ways to do this: good old-fashioned checkbook balancing, pen and paper or checking your accounts each day.
We prefer to let an app do the hard work. Get yourself used to keeping tabs on your spending by using an app like Mint or Personal Capital.
This will help you better understand what your fixed expenses are each month and where you might be overspending.
2. Set Yourself a Few Fun Goals
Because budgeting can quickly become a dreaded chore, you’ll want to set yourself a few goals to keep you encouraged.
No, these don’t all have to be boring financial goals, like paying off student loans or starting an emergency savings. Although those are great, work in a fun goal, like a road trip to Maine or a cruise to the Bahamas.
Then, hold yourself accountable by using a free savings app like Dobot.
Once you download the app, connect your checking account and set your goals. You’ll add a photo to visualize your goal and give it a name. Make it exciting!
Then Dobot goes to work and will determine small (and safe!) amounts of money to withdraw into a separate, FDIC-insured savings account. The purpose is to boost your financial health, so Dobot won’t ever withdraw too much — it ensures you’re left with enough money to meet your spending needs as you save.
Bonus: Get a free $5 bonus toward your goals once you complete your first transfer.
With these goals top of mind, you’ll be more determined to maintain your budget.
3. Bundle Your Debt Into One Bill
One of the trickiest parts about budgeting is keeping tabs on all your monthly payments, especially if you have debt.
Rather than making four different credit card payments each month and logging them in your budget, make life easier for yourself by combining them under one umbrella.
Here’s how that works: Find a personal loan match through a website called Credible. Use this loan to pay off all your credit cards. Woot! No more credit card debt.
Now you’re left with one, easy-to-manage monthly payment. And, no, this doesn’t necessarily mean you’ll be making heftier payments. In fact, you’ll likely save money and maybe even pay off the loan faster.
Credible won’t make you stand in line or call a bank. And if you’re worried you won’t qualify, it’s free to check online. It takes just two minutes, and it could save you thousands of dollars — and a big budgeting headache. Totally worth it.
4. Find Easy Ways to Cut Back Big Bills
Chris Zuppa/The Penny Hoarder
Building a budget will force you to take a good hard look at your monthly expenses. Ask yourself: Am I paying too much for any of these nonnegotiables?
The answer: Probably.
Start with a bill that’s super easy to cut — car insurance. Yeah, there’s no getting around it, unfortunately. But to get the best deal, you’ll want to compare rates twice a year.
The Zebra, an online car insurance search engine that offers “insurance in black and white,” compares your options from 100 providers in less than 60 seconds.
Just enter information about your car and your coverage needs, and The Zebra shows dozens of side-by-side quotes from top insurance companies for free.
We talked to Artie Januario, who found new insurance through The Zebra and managed to knock off $30 a month — or $360 a year — from his premium.
Comparing car insurance rates is a super easy way to build some room into your budget before even making it.
5. See if Your Cell Phone Company Owes You $80
Chris Zuppa/The Penny Hoarder…
When’s the last time you negotiated your cell phone bill? Your provider could be overcharging you…
In fact, there are secret discounts it doesn’t want you to know about.
But a tool called Truebill knows how get them for you. William Ellis, a savvy saver from Indiana, was able to get $80 a year back in his pocket when he used a negotiation tool to convince Sprint to lower his bill — for the same plan. He didn’t even have to pick up the phone.
You can find out how much you’re overpaying by signing up for Truebill. Then, Truebill handles the rest.
Truebill takes an upfront commission on any money it recovers for you, but there’s no charge if it’s not successful.
6. Pick Your Go-To Budgeting Method
Tina Russell/The Penny Hoarder
Yes, there are budgeting methods — plural — but before you panic, we recommend using the 50/20/30 budgeting method for its simplicity.
Here’s how it works:
- 50% of your income goes toward essentials.
- 20% goes toward financial goals.
- 30% goes toward personal spending.
Of course, you’ll want to play around with this, but keeping these base-line percentages in mind will help you figure out how to allot your money for the month.
7. Copy This Strategy to Add $526 to Your Budget
Aileen Perilla/The Penny Hoarder
Once you start budgeting, you’ll find yourself looking for ways to pad certain areas with a little extra money. How does $526 sound?
Try copying this woman’s money-making strategy. Ever since Colleen Rice started using a free website called Rakuten, she’s received $526.44 in checks in the mail.
Rakuten has the hookup with just about every online store you shop, which means it can give you a kickback every time you buy toilet paper on Amazon — even book that flight home for Thanksgiving.
Rice says she uses Rakuten for things she already has to buy, like rental cars and flights. She even used the money she earned to help her pay for her recent cross-country move.
It takes less than 60 seconds to create a Rakuten account and start shopping. All you need is an email address, then you can immediately start shopping your go-to stores through the site.
Plus, if you use Rakuten to earn money back within the first 90 days of signing up, it’ll give you an extra $10 on the first check it sends you.
If you create a budget and realize you need some extra wiggle room, this is a great option to passively boost your income.