The financial advice you receive can often feel restrictive or negative: “Don’t eat out,” “Stop spending on things you don’t need,” etc. Following this advice is helpful, of course, but it doesn’t consider expenses like travel and rising costs of living. The truth is, you don’t need to cut back on things you like if they bring you joy. Here are some tips to budget without sacrificing fun in the process.
All necessary expenses are just that — but you’d do well to prioritize some over others. By organizing them by priority you ensure that your money has gone, first and foremost, where it is most needed. Rent, for example, should almost always come before anything else so you have a roof over your head. Then pay for groceries, utilities, clothing, and other essentials. All of which, by the way, can be paid for with a debit card so you don’t go overboard on spending money you don’t have.
This order is not universal. For example, clothing items should be considered necessities only if they fulfill basic needs. This doesn’t mean that you can’t look for pieces that you want, just that they should be considered lower priority. Ultimately, though, it’s up to you and your income to decide where that boundary is between your wants and needs.
In any case, with the responsibilities paid for, you can use the remaining funds for items that bring you joy.
Eventually, the goal is to budget so you can put away a set, feasible amount into savings each month. Don’t punish yourself if you can’t do that right away, especially if you have recently graduated.
You’re just starting, after all. For some months, money might be tighter than others once the necessities are accounted for and paid for. That doesn’t mean, however, that you can’t save — just deposit the best amount that works for you.
If your monthly savings deposit is meant to be $100 but you only have $5, then put away that $5! If all you can spare is one dollar, then that’s all you need to spare to continue your financial growth. Putting away something is better than nothing. Just as costs often build-up, so will your money over time. Future you will be grateful for any effort you’ve put in now.
Nobody enjoys the pain of watching their bank account drop after making a big purchase. The more worried you are about expenses, the harder it is to save — but you can lessen your worry. For large, non-emergency purchases that you absolutely need, prepare by putting a little extra into savings after each month’s paycheck. If you do it on the day your check drops, you won’t see that money until you have enough for the item.
This will also help you budget by allowing you to get used to living on a lower amount each month. If you haven’t already budgeted to set aside money for saving, then this can help you get started. Do give yourself a break if you’re having trouble doing this for necessities; meeting needs is what money is for! For non-essentials, it is much more worthwhile to keep your spending in check (but still be kind to yourself!).
The occasional expensive purchase is something you can plan for, but it’s the smaller, more numerous expenses that can sap your funds. Imagine this: you’re considering buying a new $300 tablet this month and are slowly saving up for it. At the same time, you’re eating out or ordering in for dinner three nights a week spending $30 each time. Dinner spending over four weeks comes out to $360, which could have paid for the entire tablet and then some.
If you’re feeling called out, don’t worry; you are allowed to treat yourself to things you like! Finding a balance is the best way to go about this so you can save money AND make those purchases. A weekly limit on nonessential spending events (or amount of money spent total) can be very helpful in this regard. If you limit yourself to two meals a week or $50 total on restaurant food, you’ll save at least $120.
Once your paycheck comes in, it’s easy to fall prey to the sense of security your restocked bank account inspires. The larger number can make it feel like your account is flush with cash. You might find yourself being less conservative with more frivolous purchases. Small payments build up over time, so make sure you’re keeping an eye on your account. It could be helpful to set yourself a minimum deposit limit so you continue to meet your goals.
Say that you receive a $3,000 paycheck via direct deposit into your checking account. After you figure your budget and the month progresses, you have $500 extra to put into your savings. Instead of doing so (and possibly dipping into savings later if your checking depletes), mentally set $500 as your minimum. Considering $500 as your new “zero” is a helpful way to encourage yourself to be more aware of your spending.
If you make enough to live comfortably, then there is another way to ensure that you are saving well. What it means to “live within your means” is simple — only spend what you have available. If you can afford it, try going a step further. Don’t just budget for the income you have. Budget for your income minus the amount you want to save.
Doing this will ensure that you consistently have the same saving amount to put away each month. The downside is, of course, that you’ll be living on less, but ultimately it’ll be a worthy “future you” investment. As you’ll be much more likely to have enough to meet your savings quota, you’ll also build your savings faster. Additionally, this saving method can help you build good spending habits regardless of how much you have.
Hopefully, you have a better idea of just how much you can do to save when it feels difficult. Saving doesn’t have to make your daily life harder, and with these tips, you can work to strike that balance. Your money is ultimately in your hands — and if you’re reading this, you’re already on the right path.