Now that your NCAA tournament bracket is busted – and there’s no shot of winning the prize money – it’s time to find another way to grow your bank account. Budgeting your money well is your best bet but, like a bracket, many budgets are set up to fail. In this article, we’ll help you make a financial plan you can follow through with.
Know your spending habits.
When you start planning your budget, it’s best to have real numbers. This means tracking your spending over the past month or two to see what you’re working with. Download the FREE Financial Planner at the bottom of this article and be sure to account for each category. When you’re finished, you should have a good picture of your average monthly spending and where you can make a few cuts.
Budget to zero to plan for every dollar.
This doesn’t mean spending until your accounts hit zero. (Nice try!) On the contrary, if there’s extra money left over once you’ve planned for your expenses, you should add that toward your savings or investments. If you don’t, you’ll often lose the chance to make that money work for you. Keep in mind, if you come up short, you’ll have to find additional ways to save.
Set your goals – what are you saving for?
Whether you’re paying off your mortgage, making an emergency fund or looking to invest, you need to determine why you’re making these sacrifices. Make a list of your goals, long-term and short-term, for motivation when you need it.
Have some fun with it.
Finance can be boring if you aren’t one of the 60% who enjoys math. We’ve found it helps to spice things up. A budget binder filled with printable resources can help keep you on track. You’re also free to highlight in it or make notes – your budget, your rules. Additionally, it helps to find an accountability partner with financial goals of their own. A spouse or friend can make the process more interesting and help you follow through. Also, remember to reward yourself when you do meet your goals!
Stay accountable by paying with cash.
If you’re repeatedly overspending in a category, we recommend using the envelope system. Just go to the bank and withdraw the amount of cash you budgeted for that category. Add it to an envelope and when the money is spent, stop spending in that category! Studies show that it’s harder to part with cash than it is to swipe a card, so you’ll likely spend less anyways.
Don’t let special occasions sneak up on you.
Some months you’ll be saving for things like holidays or vacations, and other months you’ll have the financial obligation of being a bridesmaid or groomsman. When you’re strapped for cash, it takes the fun out of celebrating! Be sure to plan for all expenses coming up and adjust as things change. An emergency fund is critical for managing surprise expenses, but be sure to stay on top of the expenses you can plan for.
Revise, revise, revise.
Don’t forget to check in from time to time and make sure you’re staying on track. It usually takes 2-3 months to figure out what works best for you, so don’t be afraid to adjust. The lofty goals you start with may not work for you in the long-run. When it comes to budgeting, the name of the game is making one you’ll stick to.