Make a New Year’s Resolution to Love Your Budget

EEBA can help – and these tips can help you love your budget, too.

Start with the basics. Begin by tracking a few basic discretionary categories. Groceries and Eating Out are two good ones to start with. Set a budget for them and track every expenditure for two months. You’ll either be surprised by how much you spend (eating out, for example) or be surprised by how much you don’t. Either way, you’ll be motivated to start tracking your spending in other areas too.

If at first you don’t succeed…keep working on it. Don’t try to get your budget right on the first try. The most important thing is to have some kind of budget and to track your spending. You can always adjust the budget for different categories once you figure out what your actual spending is.

Track, analyze, rinse, repeat. Do some analysis after 2 or 3 months. The reports on EEBA for expense by envelope (category), expense vs. budget, expense by payee (top 10 by amount and by frequency) are great places to see how you’re spending. Maybe the coffee habit is more costly than you think? Or maybe it’s just fine? Stop guessing and get the facts.

Have a budget for generosity and giving. Giving money away is one of the best ways to decrease its power over us. So, build it into your budget

Goooal! Set a goal for your budget so you’re extra motivated to keep working at it. Understanding and controlling your spending can help you reduce a big credit card balance or help you pay for a vacation in cash. You set the goal…and know your spending choices are taking you somewhere.

Speak before you spend. Make an agreement with your spouse (or with a budget-conscious friend if you’re single) to discuss any purchases over a certain price before you hand over the cash or credit card. This limits high cost impulse buying and helps build transparency in household spending. The conversation about the purchase is a great time to encourage one another to remember the goal you’re working toward.

Drop the card(s). Using cash is a great way to limit spending and help you make the connection between the value of your money and the value of your stuff. However, cash isn’t always practical. So we reach for the credit card and end up painlessly (for the moment, but oh-so-painfully later) spending more in a month than we earn in a month. Cancel the credit cards so you’re not tempted to use them. Limit your debt by spending only what you have. Use cash or debit cards. And track both on your Android phone using EEBA. We make it easy.

And Some Simple Stuff…

Make your own coffee. A cup of good coffee (with sugar and cream) can cost as little as $.10 when you make it at home. Compare that to $1.95 at your favorite café. While you’re at it, make your own muffins. Homemade muffins cost about $.10 each, compared to $2.25 at that café. Is it worth it?

Make a list before you go shopping- regardless of the store. You won’t buy what you don’t need and you won’t forget the things you do need (saving you time and gas on the unnecessary 2nd trip). The list also provides direction, which minimizes browsing for items you don’t need.

Don’t go shopping hungry. You’ve heard it before, but it’s not just about groceries. Shopping when you’re hungry leads to impulse buying. This is true whether you’re in a grocery store, an electronics store, or even shopping online. Hunger makes it harder to think straight and easier to want something, which is why impulse buying leads to bigger waistlines and more Goodwill drops in the year to come. Notice how you never go for the health snacks when you’re shopping hungry?

Love your budget!

Have any great tips to share? Leave them in the comments below!

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2 Comments

  1. Here’s some things we’ve done to stretch our dollars during these trying economic times:

    a) Meal planning. plan your meals ahead of time and cook. It does take a little work to research recipies, buy seasonal produce, look for specials at the grocery store. A family or individuals/roommates can save hundreds if not thousands of dollars by cooking rather than eating out, getting take out or purchasing pre-packaged food. Cook extra for lunches or to freeze for future meals. Start with simple pastas (tomato & meat sauce, mac & cheese) and casseroles (lasagne, tamale pie, shepherds pies). Your crock pot can be your best friend. You can make stews or soups, and with a little advanced planning and prep in the morning you can come home to smells of dinner that’s almost ready to eat. I started using the Crock pot to make steel-cut oats. Not the pasty stuff in cardboard tubs but slow cooked creamy with a little pop when you bite into it. Start it the night before and wake up to a nice hot breakfast. Also you’ll save $6 on that chocolate croissant and latte you would have bought if you just ran out of the house. Steel cut oats can be reheated in the microwave too. Just add a little water to thin it out.

    b) Rent movies on DVD. You might have to wait to see the latest but with movie tickets costing upwards of $10 and snacks and drinks costing another $7+ per person they’re great potential for savings. If you can find friends as frugal and patient as you, plan a movie night together. If you must see it in the theater, Costco has ticket vouchers which let you in at a discount. Double-check for the fine print for restrictions on those vouchers, e.g. cannot be used for the opening weekend or time restrictions and expiration dates.

    c) Cancel that unused or under-used gym membership. Try fixing up your bike and buy a new pair of running shoes.

    d) Cancel your cable bill. With digital TV you might be able to get clear HD reception and enough programming. If you can’t live without it, re-examine your subscription packages. Do you really need to pay extra for HBO, Showtime, Starz etc.? Would one premium movie channel suffice. Would you be better served by a Netflix account?

    e) Preventive maintenance on your car. Pay now or pay later. Keep up with the oil changes, tune ups, tire inflation and your car will take care of you and save gas. It could also help prevent accidents which would save money on the insurance deductible, higher premiums, loss of income and a potential headache from dealing with insurance.

  2. This is one relates to budgeting (at least sticking to it). It is actually more of a keeping your house uncluttered tip.

    When collecting the mail each day be sure to have a recycle/trash bin handy. All ads and catalogs should go directly (Do Not Pass Go, or your eyes) into the bin. Even coupons! A coupon for something you don’t need is still an ad trying to get you to spend money you don’t want to spend. Even bills and statements come with ads. Open the bill’s envelope grab the actual statement and let everything else fall into the bin with the envelope.