1. Set Your Budgeting Goals

Let’s face it, most of us can’t just save money for the sake of money. We need a purpose for our saving or else budgeting will feel pointless.

What are some good reasons to set budgeting goals?

Saving up for a vacation.

Paying off existing debt.

Saving for a house.

Planning for retirement so that you don’t have to work forever.

2.  Know Your Fixed Expenses

Before you can start planning how you’ll budget your money, you have to figure out your fixed expenses. This is so you’ll know know how much money you absolutely have to pay out every month, regardless of any changes to your income.

Your fixed monthly expenses could include the following:

Rent or mortgage.



Loan payments (student loans, auto loans, etc.).

Minimum credit card payments.

Desired savings, investments, or additional debt payments.

 3. Track Your Spending 

You have to know where your money’s going if you want to get better with budgeting.

Your fixed expenses will roughly remain the same every month. However, your variable expenses will always fluctuate, as they depend on your spending habits (lifestyle, eating out versus cooking, and so on).

4.  Embrace Frugal Living

One of the most important steps when budgeting your money is learning to embrace frugal living, so that you’re able to reach your financial goals without feeling limited.

What are some practical tips for living more cheaply?

Prepare more meals at home.

Find ways to cut back on your grocery bill.

Keep your eyes open for deals and promotional offers.

Look for free events in your community so that you don’t break the bank on entertainment.

Consider cutting one fixed expense that you don’t use that much.

Find free or low-fee banking options.

Avoid common money wasters (late fees, lottery tickets, impulse purchases, and food that will end up in the trash).

5. Pick a Budget Method 

The beauty of running the numbers and actually tracking your spending is that it makes it easier to execute those SMART goals. Once you know how much money you have coming in and out, you have a better grasp of how to budget your money.

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