Budgeting Tips For Beginners

Starting a budget can be intimidating! Here are my budgeting tips for beginners that will help you start budgeting on the right foot.

If you’re just starting your budget, or maybe having trouble sticking to one, you are in the right place! Even though I have been budgeting consistently for the last almost 3 years, I have struggled with going over budget, staying consistent and motivated.

These are the budgeting tips I come back to time and time again. They’re actually incredibly simple, and when budgeting is done right, it doesn’t take a lot of time, and (hopefully) won’t leave you in tears!

Find Your Why

Most people want to start budgeting for a reason. I wanted to pay off our debt so that we could travel more often. Although it seems like budgeting would be restrictive, it actually gives us the freedom to spend on what we love.

I’m a big believer in value based spending, meaning you get to spend your money on things that bring you joy, while cutting back on the things that don’t matter to you. We prioritize spending our “wants” money on traveling, activities with friends, and occasional date nights. We have cut back on things like cable, clothing and shoes because that doesn’t matter to us!

Decide On A Budget Method

I use the zero-based budgeting method, which gives every dollar we earn a job. That doesn’t mean my account ever reaches zero though! Read more about zero based budgeting, or watch this youtube video:

My way isn’t the only way however, you can also try the 50/30/20 method where you spend 50% of your income on needs, 30% on wants and 20% on savings.

Don’t be afraid to switch up methods if you try something and it doesn’t work for you!

Make A Date With Yourself (Or Your Partner)

You’ll also have to decide how often you will budget. A lot of people make a monthly budget, but that wasn’t working for us, so we started budgeting bi-weekly about a year ago. I make a new budget every payday. This method works really well if you have irregular income because you are making a budget with money you’ve already made.

No matter how often you choose, make sure that you commit to sitting down and budgeting for about an hour!

Have An Accountability Partner

If you’re married or in a committed relationship, hopefully they are on board with the new plan! If not, it’s great to have an accountability partner to encourage you.

Let your friends know you are on a budget. If you usually go out to expensive brunches with them, perhaps suggest cooking brunch together at someone’s house! You still get friend time, and it’s way cheaper to make your own pancakes and mimosas!

Be Honest

Be honest when you’re making your budget. Don’t try to budget $20 for groceries, it’s just not realistic. The best way to determine your budget for variable spending is to look at your past spending, and then make a goal based on that.

If you’ve been spending $300 a month on groceries, and you want to cut it back, try making your budget $280, then maybe the next one is $260, until you get to your goal budget. Usually drastic budget cutting just leads to overspending.

Create A Budget Planner

Keeping everything in one place will help you stay organized, and you won’t have to go looking for things when you sit down to budget. I have created a budget planner for you, with all the worksheets you need to create a budget, make savings goals, create a debt repayment plan, and track your net worth!

Get The Budget Binder Now!

Give Yourself Wiggle Room

This is a great way to stop yourself from spending more than you make. For example, we do zero based budgeting, meaning I assign every dollar we earn a “job” – groceries, mortgage, gas, etc. I always budget $100-$200 for surprise expenses. That way if we go over on groceries, or if we need dog food and I just forgot to put that in our budget, it doesn’t force us to spend more than we’ve earned.

Of course if you have a truly large surprise expense, you may need to dip into your emergency fund.

Check Your Calendar

This is one of my biggest tips from my 3 Common Budgeting Mistakes video! Always check your calendar for upcoming events when making your budget. Maybe you need to get a birthday present, or you have plans to go for dinner.

I also put irregular expenses in my calendar, like annual dues for professional associations and yearly vet appointments. This helps me stay on track and have less budgeting surprises!

Use Sinking Funds

I love sinking funds! They are an easy way to stay organized, and you can visually see your savings goals when you sign in to your online banking.

Sinking funds are just savings accounts for anything you may be saving up for. We have sinking funds for our car, vacations, and home renovations. You can set up a sinking fund for anything you want!

Track & Celebrate Your Progress

I have been making quarterly and yearly finance goals for the last 3 years! We have always tracked the progress and celebrated when we hit milestones.

In July 2019 we finally became debt free after paying off over $26,500 in 21 months. That was a huge deal for us, we celebrated with a trip to Toronto to see Michael Buble!

We had a progress tracker on our fridge, so that we could see our progress everyday, and that reminded us of our goals when we really wanted to spend that money on something else.

Don’t Strive For Perfection

Here’s the deal, your budget won’t ever be perfect, so stop trying! I used to give up whenever I would go over budget, but now I just adjust and keep going.

Some months we spent more than we earned, and some months we didn’t. No one is perfect, and that’s okay!

The point is; don’t give up on it just because one month doesn’t go as planned. Adjust your budget for the next month, and keep going.