8 Secrets to Building a Budget That Works


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Taking charge of your finances can be tough. Use these tactics to get maximum gain with no pain.

Some people refer to budgets as a “money diet.” That’s an unfortunate choice of words given the negative connotations associated with dieting: reduced options, deprivation, maybe even pain.

Fortunately, a budget doesn’t have to hurt. It’s not punishment for sins real or imagined, but rather a simple, smart tool for taking control of your finances.

Like a healthy and realistic diet, budgeting is all about balance: Save money where you can so you can spend where you want.

So, whip your finances into shape by following the next eight secrets to a budget that makes sense — and cents — for you.

1. Create a goal

What do you really want out of life? Maybe your budget is currently about damage control, such as managing consumer or student debt, or paying off that lemon you wish you’d never bought.

Or perhaps you are thinking about the future: entrepreneurship, a home of your own or a self-funded retirement.

Knowing what you want gives you a starting point and helps you focus on a goal, such as $7,000 for the last of your student loans, or $1,500 to kill that credit card balance once and for all. Facing the debt means you are taking charge instead of feeling helpless.

2. Schedule your goal

Financial success author Napoleon Hill wrote that “a goal is a dream with a deadline.” Without a deadline, that goal may remain on permanent “someday” status.

Prioritize your goal, whether your aim is retirement, or buying a home or car. Automate a monthly amount toward savings or debt. Open a subaccount and name it for your goal — “Pay Cash for Next Car,” “Down Payment on Home.” Then, save whatever you can reasonably afford each month.

Automate your savings. Even if you can only save $10 a month, by the end of the year you’ll be $120 closer to your goal.

3. Track your spending

If you don’t know where your money is going now, how can you make it work the way you want?

Some people keep it all in their heads. But if you’re not writing things down, it’s easy to forget a couple of bucks here and there. Those forgotten amounts add up.

For example, it’s easy to remember you spent $30 on gasoline. It’s harder to recall the extra money you spent on an energy drink and beef jerky when you went inside to pay.

You don’t have to carry a little notebook. All sorts of budgeting spreadsheets exist online. Or use a budgeting app or online budgeting software such as our partner PowerWallet, which will track your cash, measure your progress, and maybe even give you coupons.

Remember, you’re not doing this to punish yourself, but rather to get smarter about your funds.

4. Start slowly

Deny yourself too much, and you may crack after a few weeks. Next thing you know, you’re going on a wild online shopping spree or buying rounds for your buddies at the sports bar.

And, no, it doesn’t matter that you used online coupon codes or that it was $3 pitcher night. You still blew the budget.

If that happens, get yourself back on the frugal wagon, but with modifications. Allow yourself a bit of a slush fund for small niceties, or a touch of riotous living.

Remember, plenty of frugal hacks exist to help you enjoy life inexpensively — or even free. For tips, see:

5. Find a budget coach

Organizations such as the National Foundation for Credit Counseling and the Financial Counseling Association of America offer money help on a sliding-scale basis. Tip: Be sure to check any credit counseling organization through the Better Business Bureau and your state attorney general’s office.

A budget coach might have financial hacks you’ve never considered. This person can also help keep you motivated.

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