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For the month of April, we’ve been talking budgets: why budgets are important, how to set one, and how to keep ourselves from feeling deprived. In our eighth installment on budgeting, we’ll be crowdsourcing the best budgeting tips from other personal finance experts around the web. If you’ve wanted to be a better budgeter and improve your budgeting habits, you won’t want to miss this post!
Happy Saturday! I know we didn’t have a post on Thursday, but I promise it will be worth it – look for a fun budget post and giveaway this Tuesday! 🙂 Next Thursday, we’ll be summarizing all that we’ve learned during our April budgeting topic month.
On Twitter, I recently asked what other personal finance experts think are habits that make people successful at budgeting. To make up my own word, what makes a successful budgeter! Read below to see what some of these experts think make successful budgeters, and how their advice can help you become an expert budgeter too.
They’re Consistent and Engage the Family
As we’ve discussed when creating your budget and saying “no” even when you feel like you’re missing out, it’s really important to be consistent when managing your budget. As Steve from MoneySmart Family mentions, his family reconciles his budget twice a month together – every month.
This is a really important thing to keep in mind when you’re budgeting: if you have a family (spouse, kids old enough to understand money concepts), you’re in this budgeting thing together. It’s important to get everyone on board to understand what your priorities are and why you’re saying “no” to some things.
Successful budgeters know it’s important to get family on board before setting up a budget and tracking expenses. By sitting down together twice a month (if you’re paid twice a month, payday is a great time to sit down and do it) and discussing your finances as a family, it will be easier for everyone to understand your goals. By seeing your savings grow, everyone should get more motivated to continue the momentum and not let each other slip!
They Ruthlessly Cut Spending
We’ve already talked about going through your budget and tracking what you spend monthly. However, as Steve from Steveonomics points out, you have to track what you spend and cut the waste. Sometimes it’s hard to cut out extra luxuries when you don’t have many as it is, but focus on your priorities. Do you really need that Netflix account, or can you get away with renting $1 movies from RedBox? Depending on how often you watch movies, RedBox may be cheaper.
By cutting the waste and being ruthless with your spending, you’ll be able to add to your savings for either your emergency fund or whatever priority you’re saving for. Successful budgeters know they have to cut waste ruthlessly now so that they can enjoy their savings later.
They Find Fun Ways to Work Around Their Budget
Sarah from The Frugal Millionaire mentioned in a recent comment that she has to balance her new friends’ invitations out to kid-friendly activities that cost money with her budget. Sarah found her kids get just as much enjoyment from the local library, which is free, as they do a local Discovery Center, which costs money.
Sarah notes in can be hard to talk to people, especially new friends, about your budget, and I agree. Whenever I’ve made new friends with expensive habits, I don’t immediately tell them about my budget. Like Sarah, I balance activities that cost money with free activities, then slowly ease my friends into my savings-friendly lifestyle.
Eventually, most people start to embrace the free activities – especially once they see how much they’re saving! Successful budgeters find ways to work around their budget ahead of time, so that they can still enjoy time out with new friends without having to explain their budget (yet or ever!)
They Do Tell Their Friends About Their Budget
On the other side, Tonya from Budget and the Beach has let her friends know about her budget. Tonya mentions in a recent comment that some of friends make bigger salaries and tend to want to go out more frequently. Instead of dodging questions about her budget, Tonya has made her friends aware of her priorities.
Best of all, Tonya’s friends have embraced her priorities and even read her blog! This is a great way to find out who your friends really are – as I mentioned in my post about shopaholic friends, sometimes you find out your friends don’t really care about your budget or priorities. In those cases, it’s hard, but you have to let them go.
Instead of that scenario, Tonya has friends who support her priorities and cherish her friendship. If you have good friends who like to go out more frequently than you, share your priorities with them. You don’t have to talk numbers, but just let them know you’d like to do some fun, free activities occasionally too. Successful budgeters know that the right friends, the ones who care, will be on board and support their priorities.
They Don’t Let Expensive Things Tempt Them
Has anyone ever asked you what you would do if you won the lottery? Have you ever bought lottery tickets with visions of riches in your head? While it’s sometimes fun to watch videos or shows about the rich and famous (look at those yachts! Those clothes! Those cars!), successful budgeters don’t let things like this tempt them.
Yes, I know – we all can’t buy yachts. But have you ever bought something “expensive” because the celebrities were doing it? Maybe you bought a $500 purse, or some $175 oxygen facial, or some kind of skin cream with gold in it… not judging here, I’ve bought an expensive purse or 2 before, but to build a successful savings, you can’t let these luxury riches tempt you.
It might be nice to live the lifestyles of the rich and famous, but unless you’re on track to make over a million dollars a year, why buy it? I’m not saying you can’t do nice things for yourself once in a while, but don’t torture yourself by living the life of luxury for a few minutes only to return to reality. Also – those expensive bags, TVs, or cars? If you ever got robbed, you wouldn’t miss your $50 TV like you would your $5,000 TV!
Successful budgets don’t delude themselves into think an expensive item will make them rich. They know that their priorities are sound and, sure, while they’ll never be Kanye and Kim, their families will be healthy and well-taken care of.
What do you think makes someone a successful budgeter? If I’ve missed anything, let me know! We all could learn how you (or someone you know) budgets successfully, so we can adopt some of their financially-healthy habits!
Good points! I think one more thing…or two more things to add would be to check in with your budget often. I think sometimes people set them up, then forget to see how things are going within the month. The other thing is to have your budget be flexible and have it change per month as needs shift..for instance one month might be wedding heavy or you might be traveling. Budgets are living, breathing things. 🙂
That is such a great point, Tonya! A budget is a living, breathing thing, and should evolve as you and your priorities change. Thanks for reminding me about wedding and travel planning 😉 That’s pretty much where my savings is split this year, but those are my priorities, so I’m enjoying cutting spending and saving up for those things! 🙂
I think the second is the most crucial and the most difficult for most to do. At least, I have the hardest time with that.
After a certain point, it really gets hard to cut expenses down any further. I know there are still things I could cut down on (hair and make up), but I also need to look semi-presentable at work, so it’s a balance. It’s even tougher when you’re trying to get the family on board!
Great points! Turns out I follow most of these already so maybe I’m good at budgeting after all. Although I do admit, I don’t mind spending on expensive items. This assumes I’ve already met all my savings goals.
Barry, it definitely seems like you’re a great budgeter! I especially liked one of your last comments, about you don’t let others perceptions of you derail your savings goals, like going on vacation. That’s an awesome skill to have – one I definitely need to strengthen!
Great advice! I think making sure that we still have fun while living on a budget is important. Don’t try to cut your budget so tight that you can never have fun and feel like you are deprived.
Exactly, feeling deprived is one of the quickest ways to break your budget. It’s like dieting – when you say you “can’t” have something, you’re much more likely to binge on it later. Like I’ve learned with eating healthy, you have to strengthen your resolve and say you “choose” not to eat something/spend that money, not that you can’t. And, of course, allow small splurges here and there 🙂
That last point really resonates with me. We’re not in the habit of making expensive purchases, instead favoring little luxuries like a new book or a great cup of coffee. However, we do love all things Apple and are debating back and forth on getting apple watches. A friend who has had their watch since the release has said that it is truly a luxury (more so than the other iDevices which can be really helpful tools). So we’re on the fence on this indulgence.
Oooo, Apple watches! Obviously, there will be a lot of people who say “don’t get it” because of expense, being the first one to try it, etc., but if that’s your biggest splurge and you really love it… it’s hard to say no! Some people prefer to spend their money on expensive vacations – if yours is cool devices, no shame in that! 🙂
Currently we are in the middle of move and construction so the budget is sort of out the window but I am trying to maintain something near normal with using the food in the freezer and pantry to offset the eating out budget that we normally don’t have. I think that the first thing is to think back to things that used to be treats like eating out and make sure that you aren’t eating out every week so that you don’t have to cook but because it is a special treat. We make most of our food from scratch so this period where one house is on the market and the other is under construction is hard because we end up eating out because we are without other options. We can’t wait to get back to the old frugal ways and live much more simply. We saved to afford our new house and we are going to stay home and enjoy it as much as possible! My husband gets paid once a month so budgeting is also important and we will get back to checking in with things more often when we are settled. Love free activities and can’t wait to fill up the summer with them. Great post and great points!
Oh man, I hope construction wraps up quickly, Alison! Sometimes life throws wrenches in there, like eating out a lot, but the goal is to get back on track as quickly as possible. It sounds like you guys are doing a really good job at budgeting, so don’t let this construction project get in the way too much 🙂 It will be nice to enjoy your new house though – especially if construction is making it even nicer! 🙂