Budgeting Tips For Beginners
My wife and I started budgeting about three years ago. Through both trial and error, we have developed a decent process. Recently, we were asked to counsel some friends who are trying to manage their finances better. They have the desire to improve but lack some understanding of how to start. It was challenging to identify a few key elements that have helped us progress, but here are some budgeting tips that worked for us:
1. Keep it Simple: Master the basics before complicating things. You don’t need to separate food expenses into ten different categories, nor do you need a degree in accounting to get started.
2. Keep it Fun: In the beginning, we treated each other and “danced it out” when we made progress. It may sound silly, but it kept us motivated! Watching a movie afterward helped us decompress and lighten the mood.
3. Don’t Overwhelm Yourself: It takes time to get comfortable with budgeting. For us, it took about six months before it started to feel manageable. When discussions became heated or exhausting, we would write down our thoughts and to-dos in a notebook to revisit the next week.
4. Be Patient with Yourself and Your Spouse: It’s essential to nurture both yourself and your relationship during this process.
5. Be a Team: Be vulnerable and honest. If someone feels forced to budget against their will, they will resent it. If you’re trying to admit past mistakes to your spouse, acknowledge that you’ve made errors and express your desire to change. Open dialogue about your struggles—whether they are relational or financial—can foster teamwork.
6. Set Ground Rules: Establish rules for discussions. For example, either person can call a time-out if the conversation gets too heated, and both should express their feelings. One rule my wonderful wife established is that we only discuss finances during our designated budgeting meetings. If a topic arises during the week, we jot it down in our meeting notebook to address later.
7. Don’t Meet Monthly: Some people attempt to budget monthly, but it may hinder progress. Meeting weekly or bi-weekly is more effective because: A) If you miss a meeting, it won’t be two months before the next conversation; B) You create more momentum; and C) There’s a lot to navigate at the start, making frequent discussions essential.
8. Be Creative: We use envelopes for categories with many transactions to control spending. For example, we use credit cards for gas to avoid unpacking the kids in the winter, and we use a debit card for our budget categories. The key is to create various options and use them where they work best.
9. Welcome a Little Bit of Work: When we began, we eliminated electronic payments and switched to paper bills to pay more attention to our spending. While this isn’t crucial, introducing some manual work can help you stay more engaged. Relying solely on auto payments and software can make it too easy to overlook your finances.
10. Celebrate Progress: While you may not have paid off your mortgage yet, celebrate milestones such as completing a three-month goal or establishing your short-term emergency fund. Recognizing these achievements will help you feel like you’re making progress.
Those are just a few insights we gathered when we started budgeting. Do any of these resonate with you? Are there any additional tips you would add to the list?
