9 ways to make your budget actually work

You need a budget. No, really—you need a budget. Even if you just won the lottery and are now trying to decide which castle in Europe you should buy, you need a budget! So how do you begin? Read on for some ideas on ways you can make your dollars count, whether you have a million or only a few.

1. Make a budget

Yes, we already said this. But it bears repeating, because too many people feel that they can maintain a budget in their head. Unless you have a perfect memory, this is not a viable option. Create a written, planned budget that you can adjust as your life circumstances change.

2. Detail your spending

Creating a budget is not the time to skimp on the small details. The more you plan and track your spending, the better your money skills will be. This means you need to plan for different categories of your life, like utilities, the mortgage payment, your taco needs (definitely don’t skip this one), your grocery spending, after-school activities, clothes for growing children, and everything in between.

3. Update your budget

This is another area that may seem obvious, but budgets work by first planning your spending, and then tracking your spending. It is unlikely that you will spend the exact amount for every item down to the penny, but that doesn’t mean you shouldn’t record your spending. Knowing exactly what you needed for each category every month will help you plan for the future.

4. Share with others

This is not a suggestion to post your budget on Facebook. Don’t be that person. But this is a suggestion to share your budget with the people it affects. Your spouse, for instance, needs to be part of your initial budget creation. Making a money plan won’t help if you are the only one with the information.

5. Regularly review your spending

Now comes the hard part—regularly reviewing your budget. Why is this so important? Well, budgets and bikes have one thing in common: you have to practice to be good at them. (They also both start with the letter “B.”) This means that you need to create a regular habit of looking at your budget, seeing where it works and where it needs improvement, and making those adjustments accordingly.

6. Respect your budget

Spoiler alert: Your budget is only effective if you adhere to it. Sure, emergencies happen. But blowing your clothing budget for an adorable pair of heels is not an actual emergency. Stick to your budget as closely as possible in all categories to maximize the efficiency of your hard work.

7. Look for adjustments

Do you still feel your budget could use some improvements, even after you have stuck it for months? Look for areas where you regularly overspend or underspend, and see if adjustments could be made. You may find that your budget needs some reworking to account for changes in your life.

8. Account for emergencies

We already talked about what constitutes a true emergency. Unfortunately, there may come a time where you have unplanned medical bills or need to fly out to visit a sick relative. You can’t predict these things, but you can definitely prepare for them. If you don’t use your emergency funds, great! More birthday presents for everyone. But it’s always better to be ready.

9. Simplify your budget

There are dozens of options for creating and tracking your spending. Our vote is for something useful and easy to operate, like the You Need A Budget app for your phone or tablet. The app focuses on spending only what you have available to you, and nothing more. You can even set budgeting goals for the app to track your progress. Having your budget at your fingertips will go a long way in tracking your spending, and preventing those impulse purchases.

We’ll say it again: you need a budget. Whether you decide to track your finances on paper or make use of an app, it all starts with making a plan. Do it, stick to it, and watch as you become a financial force to be reckoned with.

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