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Budgeting Do’s and Don’ts

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Does it seem like every time you read something about getting your basic finances together, the story mentions the “B” word? Well, this one will be no exception, since establishing a personal budget can go a long way toward helping you develop healthy spending habits, put something away for the future, and have a bit of cash for unexpected expenses.

Yet just 41 percent of U.S. residents follow a monthly budget, according to CNN Monthly. Much of that is owing to procrastination, a lack of knowledge, or fear of learning how much they’re shelling out for extravagance or unnecessary items.

If you’re serious about setting up and sticking with a budget, here are some budgeting dos and don’ts.


Follow Your Spending Patterns

The first order of business is for you to set the next month aside and home in on your spending. You really need to see where your money’s going. And do not let fear stop you; this is a crucial first step that will ultimately put you on a better financial path. For instance, if groceries currently cost you $300 monthly but you just set aside $175, you may be on the verge of digging yourself a hole.

And you needn’t track your spending with a spreadsheet or some sophisticated app – unless you want to. Just jotting things down on paper will suffice. 

Set Your Goals

It’s important for you to establish near-term as well as long-term goals. Writing them down will also help make clear in your mind what your ultimate aims are. 

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Examples of goals could include college savings, vacations, building retirement savings, and establishing an emergency fund. Regarding the latter, you should save $1,000 for your “starter” emergency fund, according to Dave Ramsey’s Baby Steps Dos and Don’ts. At length, you want to build that fund up to six months of expenses.

Make Priorities

So, you have identified your goals. Now you must go about prioritizing them. If saving for college is more important to you right now than buying a new car, then budget accordingly. It’s also important to note that priorities can change over time – and that is okay. Simply adjust your monthly spending.

Go Slowly, at First

When you’re just getting started with this whole budgeting thing, only budget for the next few months. Once you see progress and you’ve got a better handle on what you’re doing, you can begin budgeting further ahead.

Be Persistent

Remember that 41 percent stat? One reason why the number is so low is that people make a budget, then, for whatever reason, don’t stick with it. If you keep at it, you’ll develop a practical and realistic spending plan that works for you. Do not give up.


Don’t Be Excessively Rigid

Don’t pinch pennies too severely when establishing your budget. Quality of life is still important, right? Make sure you leave a bit of room for fun but making sure that this part of your budget remains under control.

Don’t Forget Birthdays

Don’t be remiss in terms of irregular monthly expenses such as birthdays, house repairs, holidays, etc. Build these into your budget each month.

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Establishing a budget that you can handle can help you take control of your personal finances and hit your financial goals. Now you have some budgeting dos and don’ts to help guide you.

If you’ve fallen into unmanageable credit card debt and want to get a handle on that first, we suggest Freedom Debt Relief, which can get you on the right track.