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Budgeting!! Who likes budgeting? Most people cringe at thoughts of spreadsheets, financial statements, and being restricted, unable to enjoy life’s pleasures. (Well, except me, I actually love spreadsheets. Call me weird.)
I’m here to tell you, NO! It does NOT have to be that way! Budgeting can be pretty darn painless, actually. Some people may even enjoy the challenge of living well and finding frugal (read: cheap) products and ways of doing things.
It can be fun to see who in the household can find the best deal on (fill in the blank). Making a game of it can be pretty entertaining. And knowing just where your money goes can actually be a big relief. Simplifying your budget can also help you enjoy the little things. Ever hear the saying “stop to smell the roses?” We all have, right? If you or your neighbor has a rose garden, roses are, you guessed it, free! The point being, enjoying life does not have to be expensive.
Here are 5 painless ideas to simplify your budget, not only growing your savings, but also adding more enjoyment to life.
Consider what truly makes you happy
Don’t start just cutting expenses willy-nilly. That’s not sustainable in the long run. I’ve tried this and within 2 weeks I ended up worse than I started!
What does “living well” really mean to you? Maybe it’s a coffee date with a good friend, or a date night with your significant other. Does traveling get you all excited and pumped? How about playing in the park with the kids (or dogs)?
Now consider all the random things you spend money on. The newest household gadget, or the trial subscriptions that you signed up for and forgot to cancel? What about your Amazon addiction (or in my case, Temu)? Impulse Target purchases? I bet a lot of that stuff doesn’t contribute to your quality of life!
Simplifying your budget means cutting back on the things that really don’t matter. If you can’t totally give up Target, there are strategies to help you reduce your impulse spending. For example, every time I think about purchasing something I don’t really need, I ask myself, what’s more important, this (fill in the blank) or my truck? My truck always wins, hands-down, every time! Or uninstall that shopping app and order your groceries online to pick up later!
So, what brings real value to your life? Make a list to keep it front and center!
Implement the 50/30/20 method of budgeting
Okay, okay, I get it. Been there, done that. The key here is to realize that the categories can be flexible based on your needs. The general rule of thumb is this:
• 50% of your income goes to the actual NEEDS. Think: housing, food, and bills. You gotta pay it! We all want the bills to go away, but, sadly, you have to pay them!
• 30% goes to WANTS. I WANT that trip to Disneyland (not really, but you get the picture) but I won’t die without it. More down-to-earth examples are eating out 3 times a week, daily coffee (guilty), or hobbies.
• The last 20% is for savings and debt payoff. When I finally curbed my spending, I now have a decent savings account for the first time in my life. (Until I bought my truck, but I’m slowly building it back up!)
Now, keep in mind you can be flexible! If your rent or mortgage is really high but you have no control over it (moving, etc.), you may need a bit more than 50% for the needs category. Maybe you feel like you really don’t need all that much to be happy, so you could reduce the wants category and up the savings category. Just remember to allow for a reasonable amount of fun money.
Automate Your Budget!
Automatic bill pay is a wonderful thing! I am going to age myself and tell you that I remember the stone age before autopay existed. The late fees were a killer because I was so awful at managing my money. Now I automate just about everything from the mortgage and truck loan to the phone bill and savings. I don’t know how many times it’s saved my bacon, and it’s a huge relief know everything is covered!
Split your bills, too. Some of my bills are a bit high for one paycheck to take a hit, so I schedule to send half the amount every two weeks. Same with my truck loan. Side benefit: you get ahead! By doing this, my loan term will be reduced by a year!
As for debts, schedule the minimum payment on the regular due date so it doesn’t catch you off guard and hit you with an astronomical late fee. Then every other week or so, send an extra payment. Again, this helps you pay off the credit card or loan earlier and save you the interest cost!
Other things you can automate: direct deposit your paycheck or social security check, split your direct deposit between a savings account and a spending account, or just schedule the amounts to automatically transfer from one account to the other. Automate your retirement account while you’re at it. You can’t spend money you don’t see!
Fun on a budget
Having fun doesn’t have to cost a lot of money. Once you have your regular, critical bills taken care of, take a look at how much room you have in your budget for fun stuff.
Entertainment doesn’t have to be a trip to the movies. I don’t even want to calculate how much that can cost these days – you need to consider tickets for however many people are in the group, snacks, and drinks. It’s insane! Even if you go to the budget movie or matinee, it can break the budget.
A great alternative is to just simply watch a movie at home. Streaming services will probably have all the latest shows, or you can fire up your VCR or DVD player (dating myself again!) and watch your old favorites. Snacks are free! Plan ahead and have everyone’s favorites on hand. Pile on the couch and hit play! Bonus points if you know somebody with surround sound and one of those humongous TV screens that would take up half my living room!
Better yet, see if your town has free outdoor movies or concerts when the weather is nice. Checking out a show at the local “Movies on the Square” or “Concerts in the Park” is a fun way to meet people, too!
Track your spending
Okay, you knew it was coming! You cannot have a reasonable budget if you don’t first know where your money is going. It doesn’t have to be painful, though (well, not much). The key is to keep it simple and don’t overthink it.
Start a spreadsheet (or just a notebook if spreadsheets scare the crap out of you). Divide it into 3 broad categories (Needs, Wants, and Saving/Debt, in case you weren’t paying attention). Now, for the next week or so (I prefer a month to catch some of the random things that come up), I want you to write down everything you spent. Keep it super-broad, if you have to. You don’t need a million sub-categories (guilty!).
Rent? Need. Car Insurance? Need. Visa bill? Debt. Transfer money to savings (good for you!)? Savings. Daily coffee? (crickets….) If you’re spending $7 a day every day on the way to work for coffee, and can easily make it at home, this is a Want, no matter how much it feels like a Need!
This is a great example of budgeting: decide how many times a week (max) you will stop for coffee (it’s 3 for me, though I do fall off the wagon at times). Save for that amount each week! You do not have to cut out your coffee fix, though a lot of budget experts will say, cutting it out completely will save at least $35 a week. Think about what’s realistic for YOU!
As for categories, if you make subcategories like “groceries” and “household items,” don’t stress over splitting up your receipts. I still cringe when I think about the time I wasted trying to track exactly where every penny went; I could never decide where the sales tax went! Again, keep it simple! I will hammer that nail until the cows come home. If you want to succeed at budgeting, you have to keep it simple!
Something else that is worth a try is looking at your bank’s app and see if it offers budgeting tools like automatically categorizing expenses. It can be a little tricky, because, for example, it may not recognize NAPA as automotive expenses, or maybe you buy gas at your grocery store’s gas pumps, and you have to “train” the app.
Conclusion
There are tons of great online resources and apps where you can dive deeper into all things budgeting and finance. A few of my favorites:
In the end, just do what works for you. It will probably take some experimenting to see just how many categories you need or don’t need when it comes to tracking your spending. Just stay roughly within your 50/30/20 rule and you will be fine!
So, tell me…did any of these ideas light a bulb over your head? What other budgeting tips do you have? Tell me which of these tips you would like to try!
Bonus Tip: If you are the DIY type, learn to make some things at a fraction of the retail cost. Here are some natural DIY skincare tips and more here.