8 Secrets to Building a Budget You Can Live With

Taking charge of your finances can be tough. Use these tactics to get maximum gain for minimum 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; it’s a simple, smart tool for taking control of your finances.

Like a healthy and realistic diet, budgeting is all about balance: saving money (or calories) where you can so you can spend (or eat) 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 in the short and long terms? Maybe your budget is currently about damage control: managing consumer or student debt, or paying off that lemon you wish you’d never bought.

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

Knowing what you want gives you a starting point: $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, name it for your goal (“Pay Cash for Next Car,” “Down Payment on Home”), and save whatever you can reasonably afford each month.

Don’t make the mistake of thinking, “All I can afford is $10. What’s the use?” Automate it. 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, or so they say. But if you’re not writing things down, it’s so easy to forget a couple of bucks here and there – and that adds up.

For example, you know you spent $30 on gasoline, but conveniently forget the energy drink and beef jerky you bought when you went inside to pay.

You don’t have to carry a little notebook. All sorts of budgeting spreadsheets exist online, such as Mint and moneyStrands. 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 “14 Ways to Have More Fun for Less Money” and “10 Fun and Inexpensive Things to Do With Your Kids This Weekend.”

5. Find a budget coach

Organizations such as the National Foundation for Credit Counseling and the Association of Independent Consumer Credit Counseling Agencies 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 may have financial hacks you’ve never considered. This person can also help keep you motivated, especially when it comes to the progress you make.

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