For many people, making a budget sounds about as fun as getting a filling at the dentist.
But believe it or not, a budget doesn’t have to feel restrictive. Done correctly, it can actually make it easier to do the things you enjoy.
For advice on how to make a budget, we spoke with four personal finance experts. Here’s what they had to say about how to make a budgeting plan you’ll actually enjoy.
1. Make budgeting easy with an expense-tracking app
If you hate budgeting, Holly Weidman, the financial blogger behind Mrs. Savvy Saver, says you might be doing it wrong.
“[People think] budgeting takes an enormous amount of time,” she said. “Budgeting is complicated. Budgeting is restrictive. Budgeting takes all fun out of life. These are all true — if you aren’t budgeting correctly.”
According to Weidman, people spend too much time worrying about their expenses. Instead, they should outsource the heavy lifting to an expense-tracking app.
Weidman’s favorite is You Need a Budget (YNAB). “It’s easy to use and you can enter your spending as it happens,” she said. “Look at your categories and see exactly how much you have to spend.”
Instead of guessing how much is in your bank account, you’ll know exactly what’s going on with your finances. As a result, your financial choices will get easier. “Decision-making based on facts keeps you from frustration,” said Weidman.
To get started, download an expense-tracking app such as YNAB, Mint, or Digit. Enter your income, expenses, and savings goals, and the app will do the rest of the work for you. As you meet your goals, you might feel motivated to keep going.
“A great working budget gives you amazing power,” Weidman said. “When you pay off your student loan because of your budget or take a vacation debt-free, you will find that budgeting is exciting.” Instead of feeling restricted by your budget, you might just feel liberated.
2. Balance short-term happiness with long-term goals
Ashley Feinstein Gerstley is a money coach and founder of the Fiscal Femme who loves empowering her clients to reach their financial goals. To that end, she encourages people to work happiness into their spending plan.
“Be sure to allocate your money in ways that maximize your happiness in the present but also set you up for financial freedom and joy in the future,” Gerstley said. She recommends working a “fun” category into your spending plan, rather than eliminating it altogether.
Of course, you also need to set money aside for essentials, including rent, food, and student loan payments. Plus, it’s wise to put money into an emergency fund. But don’t neglect space in your budget for things you enjoy.
“We typically think of budgets as being very restrictive; they make us think about having to say no to things and deprive ourselves,” said Gerstley. “But budgets can actually be freeing and powerful.”
To get started, take a look at your monthly income and expenses, and create different spending categories. Then, figure out how much you can spend in each while still staying on track for your savings goals.
That way, your budget will show you how to afford the items and experiences that make you happy, rather than force you to eliminate them completely.
3. Don’t let special treats become routine
Christine Luken is a certified financial counselor and author of “Money is Emotional: Prevent Your Heart From Hijacking Your Wallet.” According to Luken, we overspend when we allow special experiences to become routine.
“Many people get into financial trouble because they haven’t put reasonable limits on their spending,” said Luken. Instead of giving into the “treat yo’ self” mentality, Luken encourages people to treat themselves less frequently.
That might sound dreary, but according to Luken, this approach to budgeting could improve your quality of life. “Placing limits on our financial fun actually makes us happier,” she said. “We enjoy the little pleasures in life, like massages, Belgian chocolate, and fancy lattes more when we have them less often.”
If you can relate, take a look at what you’re spending on special treats. You don’t have to cut them out completely. Luken recommends working “portion-controlled fun” into your budget — but you need to set reasonable limits.
Not only will you save money, but you might enjoy those treats even more when they’re not part of your regular routine.
4. List your spending categories in order of importance
Jen Smith, the saving and frugality expert behind Saving With Spunk, knows how hard budgeting can be when you’re paying off debt. She and her husband paid off $78,000 in two years, and they learned big lessons about budgeting along the way.
“The biggest thing we learned about budgeting is to budget by priority,” said Smith. “I like to use a grouping method. Group one is basic groceries, housing, utilities, and transportation. Group two is internet, cell phone, and medical expenses.”
For the third group, Smith puts money into an emergency fund, savings goal, or debt repayment. “Whatever’s left goes to group four, all things I can live without but make life more fun,” she said.
For Smith, this system of grouping helped make her spending plan a success. “Declaring what the priorities were in my budget made saying ‘no’ to things in group four a little easier, and gave me more confidence in budgeting,” she said.
If you’re struggling to curb overspending, this grouping method could help. Figure out what your priorities are and how much you need to spend in each category. When it comes to “group four” expenses, you’ll know exactly how much you can spend — and when you need to cut back.
If you ever find yourself with nothing left for group four, you could try a “no-spend” challenge for the week or month.
Learn how to make a budget that works for you
Taken together, the advice from these four personal finance experts share a common theme: Budgeting doesn’t mean you stop spending money on fun. On the contrary, it shows you how much money you have every month to treat yourself.
Plus, making a budget means setting reasonable limits on your spending. By tracking your expenses, you can both live in the moment while staying on track to meet your long-term savings goals.
If you’re ready to take control of your finances, check out this guide on how to make a budget, step by step.
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