Jen Glantz shares five money-saving tips a friend gave her. Gaby Deimeke
Our author has always struggled with budgeting. She tried different strategies, but always gave them up quickly.
But a conversation with a friend turned things around. Now she’s saving more than ever, so Jen Glantz.
Her friend taught her how to set a budget that is realistic and flexible and will help her achieve savings goals.
For most of my life, setting and sticking to a budget has seemed impossible. I made an outline of how much I wanted to spend for the coming month, had a loose plan, and forgot the budget a few days later.
One of my biggest goals for this year was to break that bad habit and start planning more seriously. I’ve read up on other people’s best tricks and tips – like using a budget worksheet, putting money in envelopes for the month, paying for things with cash only. But I was still skeptical about sticking to all those resolutions.
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I reached out to a friend who is a mother of three and prides herself on staying on budget. She sat down with me, showed me her approach and gave me five techniques that I am now implementing. And the result? I’ve stayed on budget every month this year and even found ways to save an additional $1,000 a month. Inspired by this friend’s valuable advice, here’s what worked for me:
1. Be realistic
One of the biggest mistakes I’ve consistently made with my budgets is promising to only spend a certain amount each month that just wasn’t realistic. It was always at least 25 percent below what I had spent in previous months.
Instead of trying to change two habits (overspending and not sticking to a budget), my girlfriend taught me to set a goal for each. Setting a budget that aligns with current spending is a great way to get on track and organized. After that, you can adjust the budget to reduce spending in certain categories so you can save more.
Not only did I do that, but I made sure to plan my budget so I knew what was going to happen that month. Each month the amount I want to spend varies. Some months I spend more and save less, and other months it’s the other way around.
2. Update your budget regularly
Creating a budget is not only a process, it can also be very time consuming. If you’re using someone else’s budget worksheet, you’ll need to adjust the categories to suit your needs and review your spending so you know what your plan might look like. If I made the effort, I usually gave up on the budget after a few days.
Instead, updating my budget and monitoring my expenses has become a daily exercise. Every night, after dinner, I sit down with my Excel spreadsheet and write down what I’ve spent that day. This gives me an idea of what my expenses look like for this month. This helps me to keep a better eye on my finances and not be surprised at the end of the week by unforeseen purchases that I didn’t plan properly.
3. It’s okay to shift money around in the budget
I always thought the secret to staying within your budget was to stick to it very strictly. According to my friend, the opposite is the case. It’s okay to review your spend week-by-week and see which categories need adjusting.
Let’s say you overspend in the food category but underspend in the clothing category. You can move money from one category to another.
I sit down every Sunday and roll over the allocated money based on my need for that month. The lesson: Stick to the amount you’ve budgeted for the month, but be more relaxed about where exactly the money is going.
4. Plan for unexpected expenses
I never had an emergency category in my budget, so any time something happened that I hadn’t planned for (a co-payment, a handyman bill, etc.), I would get frustrated and abandon the budget. While we can’t anticipate what’s going to happen over the course of the month, setting aside a few hundred bucks for spur-of-the-moment or short-term expenses is a better way to stay within budget.
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Since doing this I feel less pressure and less scared when something happens that I didn’t plan for. I’ll just take the money from this emergency category and fill in the rest from my nest egg.
5. Learn to say no
If you’re on a budget, you know how much you can spend each month on everything from groceries to activities with friends. With this kind of structure, I know in advance what to say yes to and what to say no to.
This makes it much easier for me to turn down things in advance (whether it’s events, happy hours, or weekend trips). If I haven’t planned for it and can’t set it up this month by restricting spending in other categories, it’s a no. This has helped me save money throughout the year and avoid incurring extra expenses that are nice to have, but don’t have to be.
This article translated from American. You can find the original here.