It is fair to say budgeting is similar to dieting and exercise. You spend the time crafting up awe-inspiring plans. You have details of what will work for you in your budget. You researched all the available information, books, online resources, print articles, classes, and financial planners. Most importantly, you know the exact steps to take to bring a long-term, satisfying change to your life, but yet you fail on every attempt. So what gives? Why is it so hard to create and stick to a budget? Could it be related to your current lifestyle? Here are 10 ways to live a budget-conscious lifestyle.
What is Budgeting?
Budgeting is the process of laying out your income and expenses to stay within your means—often with bigger financial goals in mind. To many, the idea of a budget seems restrictive, boring, and old-fashioned. But believe it or not, “budget” is not a dirty word, and a budget is not an outdated idea, but a useful tool for us today.
The process of attempting to live a budget-conscious lifestyle helps us focus on our needs, of course, but it also lets us find a way to afford our desires. A budget doesn’t tell us what we can’t spend; it’s simply a plan for how we choose to use our money.
How To Live Budget-Conscious Life
The number one thing that can change your budget and your life is you. It all comes down to your mindset and how you view your money and your ability to budget your money. Having the proper mindset about your money, how you spend it, how far it goes and what you achieve with it makes for an awesome overall experience.
10 Ways to Live a Budget-Conscious Lifestyle
1. Create Life Goals
I am a big believer in goal-getting. Your goals are what you want to achieve now, next year or the next 5 years. Maybe you want to be debt-free, to purchase a house, to give up your job, to have a family holiday overseas? These are all achievable goals! One of my first big goals was to save 20% down-payment for my first house. This took me a little over 4 years to achieve, but I was so focused and never missed on my budget. Always keep your goals real and at the forefront of your mind, once all your goals are mapped out and they are realistic, start reducing your budget and making small daily changes to live on less and add more to savings.
2. Prioritize Your Spending
Budgeting is an art and we all can become the Picasso of budgeting. If you are going to both learn how to live on a budget and save money then understanding your spending and making good money decisions is key. You need to know exactly what you are spending your hard-earned money on and prioritize where it goes.
To understand what you are spending your money on you need to track your spending. Writing down everything you spend makes it so much clearer. I spend Sundays going over my weekly budget and the last day of the month closing out the month’s budget to begin a new month. It does take time and effort, but this keeps me in line with my financial goals.
3. Set-up Automatic Saving
Achieving your savings goals is much easier when you move your money as soon as you are paid. It’s way too tempting to check your balance and think you have more money than you actually do and you loosen the grip on your spending a little and suddenly you’ve spent your savings for the month.
Set up an automated payment to leave your main account the day after you’re paid right into your savings account.
4. Get Out of Debt
Any money that goes towards debt puts a dent in your budget. Debt costs you money every month in interest payments and lost saving opportunities. When you are looking at how to live on a budget, paying out for debt repayments is not helpful. You want every penny of your paycheck to be working towards your goals, your savings and be available for your spending.
Your short-term goals need to be to pay off debt as fast as possible, otherwise, you’ll be living on an even tighter budget than your paycheck says.
5. Reduce Grocery Bill
There Are so many options at the grocery store sticking to a precise budget can be difficult. You need to focus on specific areas in order to have a tight grocery budget. Make you stick to your grocery list, and when possible leave the kids at home.
Purchase more whole foods, not processed. Healthy foods can be affordable. If you plan your list and look out for weekly specials. Whole grains, beans are healthy and cheap. Seasonal vegetables and fruit can all be part of your food plan. And where possible buy generic brands. Don’t buy premium brands just because. Generic and value brands cost much less than premium and taste just fine in their own right.
RELATED: 6 Costly Grocery Shopping Habits
6. Meal Planning
Meal planning is the best way to reduce your grocery bill and ensure you don’t waste any food. Some people aren’t into meal planning as much. Eating the same thing over and over can be a little bland and boring.
You can deal with those thoughts in two ways.
- Focus on the premise that food is fuel, ignore what you feel like having and have the planned meal or
- Stick to the weekly meal plan but switch up the days and have a meal planned for another day.
7. Reduce Impulsive Purchases
One of the biggest budget busts is impulsive spending. These are never in your budget, yet very easy to do. Buying impulsively when you are out and about because you’ve seen something that suddenly you must have is how you spend too much.
Moving away from impulse buying could be as simple as just not buying when you see something nice. Use the 72 hours rule or 30 days rules before you purchase anything. If you see something you really like that wasn’t already a planned purchase, wait a minimum of 72 hours or 30 days.
Ask yourself this question before a purchase, “Does this new thing fit with my goals or would it stop me from achieving them?”
8. Buy Used Items
A brand new car loses almost 10% of its value as you drive it off the forecourt. It’s the same for tools, clothes, and toys. When you can pick up quality, second-hand items for up to 90% off their new price, why wouldn’t you buy them this way? When you are in the market for a new item, do your research to find it used and marvel at the savings you make.
You can also score designer clothing and accessories at budget-friendly rates on sites like eBay and ThredUp.com. Just make sure you know what you’re buying is high quality, and watch out for imitations that are sometimes sold as the real thing. Get to know your local thrift stores/charity shops for new to you quality clothing.
9. Reduce Your Clothing Budget
Clothes are a prime area for reducing spending to help you in your quest to learn how to live a budget-conscious lifestyle and save money successfully. I bet right now you have enough clothes in your wardrobe to not have to buy another item for at least 2 years. Cut your monthly expenditure on clothes right down and save that money instead.
10. Reduce Entertainment Funds
You can pay a lot of money for entertainment. You might be surprised by what you can find just by searching online for free events in your city. You can also look for freebies by inquiring at your local library or checking the events calendar on your local park’s website.
- Plan a Movie Night at Home- There’s nothing like a movie night after a long day at work. Instead of going to the theater and spending at least $12 on admission, and another $10 or so on snacks, pop your own popcorn, buy snacks and soda at the grocery store and watch a movie from Netflix. Even if you decide to rent a movie, you will save a lot by staying in.Friday nights are typically a movie night in my house.
- Free events in your community: Music at the park is a good idea, you’ll need a folding chair or a blanket for a nice picnic
- A Walk in the Park
You certainly don’t need to forsake entertainment to live on a budget, just find the free alternatives or create your own.
Having a budget-conscious lifestyle gives us control over where our money is going. It keeps us in check with our day-to-day expenses, and helps us prepare for other expenses throughout the year. It also lets us plan for those unplanned expenses, like an emergency room visit or car repair. And it lets us have fun without going into debt.
My budget will look different from yours, and your budget isn’t going to look exactly like anyone else’s. We can tailor our budgets to meet our specific needs and lifestyle. The 10 steps listed above are a good starting place to get you on track to reaching your financial goals and living a budget-conscious lifestyle.