Budget, budget, budget, it’s vital! And with good reason too. If you want to save money, get out of debt, and build wealth, you need to budget!
It’s tempting and easy to jump straight into budgeting without first setting a plan - we’ve all been there. Now is the time to do it right and succeed! Here’s our guide of things to do before you put any budget in place
When you decide to put together a budget, it isn’t enough to know you should be budgeting because it’s the financially sensible thing to do. Instead, you should be determining solid reasons as to why you are setting a budget.
Budgets are renowned for being a beneficial tool, but we all have different purposes for starting them. It doesn’t matter what your reasons are, maybe a Star Wars lego set - we don’t judge. But knowing the why is important: it gives us a purpose, a goal, something to work towards.
Whatever your goal, be specific! The parameters can be anything, but have them; live and breathe them, they are now your life’s mission - ok, a little dramatic, but you get the picture. Just be realistic!
There could be a number of reasons why you are budgeting, you may want to save for something specific or for something that matters to you! Well, we’ve got a quick solution to help: use Douugh’s Saving Jars. With Jars, you can set individual goals and track your progress. Allowing you to live in the now and stress less.
You can’t move forward until you know your current spending and saving habits. You have to be honest with yourself and dedicate some time to a deep dive into where your money goes - the real nitty-gritty stuff. At Douugh we do all the hard work for you, showing you all your transactions in their categories. You can then set targets on your top categories, to help you keep track of how much you’re spending and on what.
At the top of your list are your essentials such as rent, healthcare, and groceries. Then comes the next level that may include transportation or cable. Once you’ve ranked your ‘true’ necessities and they are accounted for, you can look at other categories - entertainment, fitness, food delivery, and pets.
Whatever isn’t high on your list of importance, you should evaluate and decide if this is something you really need or can cut back on. If you need some help, check out How to Know when to Spend and When to Save.
You’ve taken a deep dive into your spending and ranked your spending by importance. Now, you should have an idea of where you are losing or not utilizing your money.
Brainstorm and use what you’ve recently uncovered to establish where you can make cuts. Subscriptions, that 3 pm coffee, the Uber when you could have walked! By identifying these, you can start to paint a picture of where you’re overspending and start to make a difference with your budget.
To make your goal more concrete you need to give it a due date; this will also keep you motivated and accountable. Then figure out how much weekly, bi-weekly, or monthly you need to save for your goal, and stick to it! It’s all about staying on top of your budget and knowing where you are.
Douugh can help you to keep on track with your savings, by allowing you to set a due date on a goal, and track your progress along the way. Simple, easy, and manageable!
We all have weaknesses, we’re human after all! Don’t expect your budget to be perfect the first, second, or even tenth time around, you may never get it spot on. That is because we are always learning and growing, our situations change day-to-day - let alone month-to-month.
Acknowledging your weaknesses is the first important step in preventing them from occurring. Look at the problems you’ve had in the past, and figure out how you can avoid them from happening again. Be brutal - really dissect your weakness!
Last and certainly not least, don’t be too hard on yourself. We all have good and bad days (or months). But don’t get put off, and absolutely do not give up. The more you work at budgeting the better and easier it will get. We all have to start somewhere!
We’d love to hear what you’re budgeting towards, and any pain points you may have. If you have any issues or topics you’d like us to cover let us know at email@example.com.