by Roni Davis
Budgeting can be difficult to sit down and do each month, but it is also extremely important if you want to save money for the future. As a young person, you probably have financial goals that you would like to work towards. This can be something you want to be able to afford in a year or ten years, but either way, it is important to start as soon as you can.
Budgeting can be as straightforward as creating a budget and sticking to it, but there are helpful ways that you can make budgeting easier and more effective.
Practice Zero-Based Budgeting
Zero-based budgeting is a strategy in which you account for every dollar before the new period. This means allotting certain amounts to each of your needs and expenses until you have a zero base. When practicing this kind of budgeting you will first analyze all of the “needs” that you have to pay for. These are expenses that absolutely have to be paid for throughout the month, such as rent, utilities, insurance, car payments, mortgage, groceries, and anything else you have to pay for.
Next, you can figure out how much you are going to put towards savings and paying off loans or debt. This can be the same amount each month, or vary depending on your income and other expenses. In some cases, you may use extra money in one months budget to add more to your savings than you usually do. Lastly you are left with any leftover money that will go towards extras such as entertainment, eating out, clothes, and more. Zero-based budgeting is a great way to organize your budget at the beginning of the month to ensure that you stay on track.
Make a Budget Together
Even if you don’t share money with your friends, roommate, spouse, or partner it can still be helpful to sit down with someone else to organize your budget each month. Having someone to work with will help you stay accountable so that you actually remember to do it each month. They can also encourage you to set goals and stick to them. For example, you may be inclined to skim on your savings allotment for one month to buy something that you want. A friend or partner might be able to help you see that the item is unnecessary, or find ways to rearrange your budget so that you don’t have to forfeit your savings goals.
Remember Every Month is Different
Every month is not going to be the same, which also means that your budget is not going to be the same either. It is important to remember that you may need to make adjustments in your budget some months, and that it is perfectly normal to do this. However, you should also keep this in mind when you have extra money as well.
Some months your budget may leave you with extra cash, if you don’t have anything you need to spend it on that month, put it in your savings account or mark it down as being a surplus you can use when you do have extra expenses. One month your car may break down, which is going to cost you more money for repairs. Knowing you have money left over from another month will put your mind at ease about unexpected expenses. Additionally, if you know you are going to have a more expensive month, like December, start saving for it early.
Roni Davis is a writer, blogger, and legal assistant operating out of the greater Philadelphia area. She writes for a bankruptcy lawyer in Philadelphia.