5 Simple Ways to Help You Budget Successfully

We generally make money when you get a product (like a credit card or loan) through our platform, but we don’t let that cloud our editorial opinions. Learn more about how we keep this compensation from affecting our editorial views.

5 Simple Ways to Help You Budget Successfully

When you hear the word "budget," you may instantly cringe. The word alone sounds restrictive and can be the ultimate buzzkill. However, there are ways to manage your budget so that it saves you time and money -- and keeps your sanity intact. Here are five tips to budget your way to successfully saving money.

1. Consider using online tools.

In order to keep an eye on your budget, consider using online tools that can seamlessly track your income and expenses. Here are some resources (some are free, some charge a fee) that may help:

  • Mint - Mint is a free online tool that allows you to create a budget, track your income and expenses, and set savings goals. You'll get weekly reports in your inbox so you can keep tabs on your spending.
  • Credit Karma - Although we're known for providing free credit scores and reports, Credit Karma members can also use our free My Spending tool to monitor money coming in and money going out. We sort expenses into categories, which is an easy way to identify problem areas in your budget.
  • YNAB (You Need a Budget) - You Need a Budget is budgeting software that can help you set up a budget, save for a rainy day and set aside money for larger, infrequent expenses such as annual insurance payments and more. YNAB is based on a four rule system: giving every dollar a job, saving for a rainy day, rolling with the punches and living on last month's income. To get it, you pay a $60 one-off fee.

Using online tools can offer you an easy way to create a budget and track your expenses. The key to successful budgeting is to spend less than you earn, and these resources may help you quickly see where your money is going and where you can cut back.

2. Be realistic.

Budgeting often gets a bad rap because it can feel like a restrictive diet. The key to budgeting effectively and saving money is being realistic. In other words, try to make room in your budget for things you value, including entertainment. If you need to make significant changes, consider cutting back little by little and enjoying things in moderation.

Just like changing your eating habits, you probably won't be able to completely alter your spending habits overnight. A well-balanced budget can consider your needs and wants as well as your savings.

3. Consider automating your savings.

Have you ever thought, "Saving is too much trouble"? Luckily, there's one trick that can ensure that you put aside some money each month: automation.

Consider setting up automatic withdrawals from your checking account into your savings account at least once a month. It's a common goal to aim for saving 10 percent of your income, but if that's too high, try starting with one percent and working your way up. The key is learning to live with less so that you can set it and forget it.

Jacob Wade, founder of the blog iHeartBudgets, recommends looking at your monthly income and expenses to determine how much you can afford to save. How can you put this into action? Wade offers this example.

"If you have $300 left over every month and get paid twice a month, have your bank automatically transfer $150 each payday to your savings account. You never see the money hit your checking account, which reduces your temptation to spend."

4. Try budgeting for additional expenses

One of the things that can get in the way of budgeting is surprise expenses, such as a car repairs after a crash or an illness. Even recurring expenses like annual insurance payments or paying your taxes may catch you off guard.

It's generally easier to budget for regular monthly expenses like rent, food and transportation. But all of us have expenses that are hard to budget for, and we're likely to forget about them until the payment is due or we're hit with a big surprise.

To remedy this situation, consider adding an extra category in your budget as a buffer for these expenses.

5. Adjust as needed.

A budget is a spending plan that should reflect your life and match up with your goals and lifestyle. In order to budget successfully and save money, try to review your budget every few months and adjust as needed. This is especially true if any major life events occur, such as a job loss, a wedding, or the birth of a baby. Let your budget grow and change just as you do.

Bottom Line

Ultimately, your budget should work for you and help you reach your financial goals. Putting a plan in place can help you easily track your income and expenses and also help you save money while keeping your spending in check.

Although budgeting may seem like work, this tips can help you streamline the process so that managing your money and saving become second nature.

About the Author: Melanie Lockert is a freelance writer and editor currently living in Portland, Oregon. She is passionate about education, financial literacy and empowering people to take control of their finances. Her work has been featured on Rockstar Finance, GoGirl Finance, The Globe and Mail and more.

Editorial Note: The opinions you read here come from our editorial team. While compensation may affect which companies we write about and products we review, our marketing partners don't review, approve or endorse our editorial content. Our content is accurate (to the best of our knowledge) when we initially post it, but we don't guarantee the accuracy or completeness of the information provided. You can visit the company's website to get complete details about a product. See an error in an article? Use this form to report it to our editorial team. For questions about your Credit Karma account, please submit a help request to our support team.

Advertiser Disclosure: We think it's important for you to understand how we make money. It's pretty simple, actually. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials.

Compensation may factor into how and where products appear on our platform (and in what order). But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That's why we provide features like your Approval Odds and savings estimates.

Of course, the offers on our platform don't represent all financial products out there, but our goal is to show you as many great options as we can.

Comment on this Article

Write your comment:
Enter Your Comments