Budgeting, the dreaded “B” word. No one enjoys budgeting; we all love to spend. It’s just who we are as a consumer-driven society. But we do not need to look at budgeting as if its some form of “straitjacket” to be shackled onto your finances.

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A budget doesn’t need to cripple your life or stop you from doing the things you enjoy. It simply means you’re just a little bit wiser with your spending.

Ever looked at your bank balance with dread wondering where your money went? If so, it sounds like you need a budgeting strategy.

Do you have specific goals you want to achieve, like retiring at 50? or getting out of debt? If so, you really need to create a plan on how you’re going to get there.

Here’s Some Great Tips:
1. The Envelope System

There are many ways to save money, sites offering budget savings and strategies for handling your expenses, but this may shock you in its simplicity. Commonly referred to as the ‘envelope system.’ You’re not required to be anywhere near as meticulous as other strategies, because it’s structured in a way that your needs are already accounted for pre-emptively.

So how do you implement the envelope system? It’s actually quite straightforward. Keep a handful of spare envelopes in your room and label them per spending category. For example, you should have an envelope named “groceries,” an envelope named “clothing, an envelope named “emergency expenses,” etc. This simple but powerful way of managing your money can clamp down on a lot of unnecessary expenses. This system is not a traditional budget where you track every single penny. This is a simpler and more powerful way to manage your money effectively. However, you do need to be responsible with your spending.

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Fill these envelopes every single payday to last you until next payday, try to be as realistic as possible while allocating finances -you’re not going to survive on $20 worth of groceries for an entire month.

Do not spend any more money on that particular category once the money has been depleted, if your clothing budget has been fully depleted in 3 days; you’re spending too much money on clothes.

2. Setup Different Accounts

This may sound glaringly obvious, but having multiple accounts is a great way to manage money. Have an account that’s EXCLUSIVELY for bill payments, and set up a standing order to pay money into that account every payday. Have another standing order-pay into a savings account & have a third account for spending money.

Every week, I personally put around $30 for my holidays. This works for me purely because that’s money I would’ve spent on garbage anyway (take-aways are my kryptonite).

Despite this seemingly small sum of money being deposited every week, by the end of the year, I have about $1.5k set aside. This is more than enough to go on a reasonably priced holiday!

3. Use your Credit Cards Wisely

Be extremely careful with credit; it can be easy to fall down a slippery slope. However, it can be a nice tool too.

For example, you could use it for all your expenses, and then at the end of the month, you can print off your statement and see where and when you’ve bought stuff. This can be a useful tactic to segment your spending. This is the most critical point; you need to be responsible with credit cards.

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4. Reward yourself

We all love a little reward. It could be you’ve successfully saved your money, and you can now eat out every Friday night, or perhaps you can now go on vacation.

Just make sure to shop around when buying items. So if you decide to treat yourself, check out sites like Best Budget. They offer reviews & price comparisons that will help you make wiser purchases.

Enjoy your hard-earned money, but spend responsibly. It will encourage you to focus on your spending too.

Why should you budget?

Budgeting just gives you a better perspective on your finances. It will help you immensely in hitting your financial goals.

Don’t be put off by the negative connotations that surround the budgeting process.

It’s better to be uncomfortable for two months and comfortable for ten than uncomfortable for two years because you’ve spent well above what you can actually afford.