Creating a workable budget has never been easier. There have been many different ways to create over the years, from recording expenses in a notebook, to keeping a ledger sheet, to using spreadsheets on a computer. Today, there are many financial apps available that can help make quick work of budgeting. Whether you want to enter the numbers yourself or use an app that syncs with your bank accounts, you are sure to find a tool that meets your needs. Once you have the information in front of you and can see where your money is going, it is much easier to make adjustments and find areas where you can save.
Find the App that Works for You
Finding the perfect app may take some trial and error. Some people prefer the hands-on method of entering each transaction manually, while others prefer the information to sync automatically. Some people want to track how they are spending their money, while others prefer to set up a zero-based budget in advance so they can see how much they have left to spend in each category.
Fortunately, it is relatively easy to test-drive these apps before you commit. Many are free, and the ones that do require an investment typically offer a trial period. You can also talk to friends and coworkers about what budgeting app they use as a starting point. It is important to note that you may not love any of the choices initially. There is a learning curve with budgeting, and the initial set-up can feel daunting. Commit to sticking with it for at least three months so you have enough data to provide value before you switch to a different app.
Crunch the Numbers
Once you have your app set up, you will start to see some numbers that you may not know what to do with. The easiest way to save money is to reduce spending in certain areas. Often looking at your food and entertainment budgets can be quite surprising in a negative way. There are many ways to cut expenses in these categories.
As far as fixed expenses go, it is generally recommended that your housing costs do not exceed 30 percent of your budget. As long as your rent or mortgage payment is at or below 30 percent, making cuts there probably does not make sense. Other fixed expenses, such as car insurance and internet service may or may not be negotiable. If your fixed expenses, including your housing costs, make up more than 50 percent of your income, you should look for ways to cut costs.
Check and Update Frequently
Budgeting only works if you keep it up to date. If money is tight, ignoring the situation will not make it go away. Sit down at least weekly and look at your budget. Look for areas where you are spending more than planned. If you had a busy week at work and spent more than planned on convenience food, make plans to cut those expenses the following week. Initially, creating and sticking to a budget can be stressful. Once it becomes a part of your routine, the peace of mind it gives you will make it indispensable.