Creating a Successful Budget

When you're 22 (or 42 or 102 or 2), money can be a problem. You just never seem to have enough and when you do get some, it goes too, too quickly. For me, I have found that creating a realistic budget that takes into account savings goals and spending habits, I'm able to keep much more control over my money. Here are my main tips for earning, saving, and spending the green.

  1. If you have a job, congratulations, you're now earning money! If you are new to the job scene and haven't picked one yet, my biggest recommendation is to not work at a store or restaurant you love and enjoy. Having to go there on purpose is a huge happiness crusher and can make you feel less joy when you walk in to actually shop (also, by not working at a place you really like, you avoid a lot of impulse spending that I've definitely never done). I personally have one of those typical 8-5 jobs, but jobs can come in all shapes and forms. Don't be ashamed of wherever you're working, be proud! Making money is the first step to saving and spending it!

  2. Pay yourself first. This recommendation is on pretty much every money help site I know. Start by putting money in your savings account, your 401K or Roth IRA, your emergency fund, or investments. By paying yourself first you eliminate the risk of spending that money.

  3. If you're dreaming of that big trip you want to take or that fancy car you want to buy have a spot in your budget that puts money towards it. Just because you can't buy it now doesn't mean you can't work towards it for the future! I'm currently saving for a big trip I want to take to Peru. By putting a little money towards it each month I'm able to see myself getting closer and closer to that goal!

  4. Observe your spending habits before you fill out those spend slots. If you normally spend $200 on restaurants a month don't try to limit yourself to $50. Pick a number that is within your means and within the scope of reality. If you're trying to cut back on a certain area of spending, for instance, Starbucks coffees, start by making your budget just short of your average. For instance, if you normally spend $100/month on Starbucks, limit yourself to $85 for the month and keep this number for a few months. As you adjust to spending less you can lower that number until you reach your goal!

  5. Don't be afraid to spend! Just because you want to be more frugal or more knowledgeable about your money doesn't mean you should be afraid to spend it. You earned it! Treating oneself should be right there in the budget. I like to go hiking with my sister so I add a little extra onto my gas and food budgets so I can enjoy the parks without worrying. I splurged and bought myself a state park pass because I knew it would benefit me over time. Things like this pop up all the time, the trick is to decide if it's really worth it or not.

  6. The one week rule. If you feel an impulse to buy something, try thinking about it for a week. If, in a week, you still really want to buy, then take measures to obtain said item. Often times we completely forget that impulse buy we wanted after a week and move on with our lives without spending $20 on a t-shirt we already own 7 of. As a fellow impulse master, I can confirm that waiting to forget said impulse buys will save your wallet for more important things!

In the end though, a budget is only good if you stick to it. As much as it sucks, sometimes it just comes down to willpower and the strength to walk away. Creating a budget shouldn't stop all the fun in your life but it should help you keep track of where you money's going... and how to get it going in the right places. Good luck!