Save in 2014 - Create a Budget and Don't Budge It

With the first full week of 2014 in full swing, the time is now to get going on those financial resolutions you set forth for the year. Whether you currently own your own home, are renting with plans to buy or have other future plans, making and keeping an active budget are two fantastic ways to ensure those future dreams come true.

While it may seem like a daunting task, creating a budget that you can stick to is easier than you might think. Here are 10 tips that will help shape up your 2014 budget in no time:

1. Set a goal and stick to it. A down payment on a new home; a new car; your children’s college fund; there are countless goals that are worth saving for. Set one, clearly-defined goal and work toward it. That will make reaching your goal much easier and more rewarding!

2. Track your spending. Knowing exactly where and how much of your money is going out can be scary, but it is a necessary evil when you are working toward a budgeting goal. There are a few ways to track what money is leaving your home. You can allot yourself a certain amount of cash to spend each week or meticulously record your daily debit and credit transactions, either by saving receipts or using your bank’s online banking function.

3. There is help. If counting your cash or keeping receipts seems like a lot of work, there are other programs like Microsoft Excel and Quicken or websites like mint.com that will help you track your spending habits and keep on budget. Use every tool that is available to you!

4. Recognize any areas where money is “disappearing.” Do you like to eat at restaurants a lot? Do you insist on professional dry-cleaning or car wash services? Are you a fashionista, who is always wearing the latest trends? This budgeting step may take a little more effort on your part; but, chances are that you can make a few cuts on some of your favorite extras. It may not be easy at first, but when you see those extra dollar signs in your bank account, it will be worth it!

5. Pay your bills… on time. Part of successfully creating and maintaining a budget is continuing to pay your monthly bills. Of course, paying those bills on time should go without saying; but, if you need a little help because you happen to be consistently late on payments, pretend that your bills are due 15 days before they really are. Then, you will be sure to make payment deadlines.  

6. Focus on one source of debt at a time. You may be making only minimum payments on most of your bills, but want to see even just one disappear? Choose your source of debt that carries the highest interest rate and work toward paying it off first. If possible, dump a little extra money onto that one bill each month, so that you can see it disappear! Chip away at one; then, move on to the next!

7. If you can’t see it, it’s not there.  A great way to start saving money and maintain your budget is to simply not make all of your money available. Move money directly from your checking to your savings account each pay period or each month. That way, you’ll be making yourself save and not allowing yourself to spend! It may seem like a pay cut… until you see the savings!

8. It is OK to reward yourself for diligent budgeting. While creating and keeping a budget may not be all fun and games, it is perfectly acceptable to let loose every once in a while. If you’ve curbed your shopping habit all month long, go ahead and buy that sweater you’ve been eyeing. If you’ve diligently packed your lunch all week, enjoy that cup of Starbucks coffee or treat yourself to a lunch out. Yes, you are working hard to save; but, that doesn’t mean you shouldn’t be rewarded for your efforts!

9. Life happens (and that’s OK). In the midst of all of your great savings, you may find that something comes up unexpectedly and throws you a little off course. Frankly, some expenditures are unavoidable. Deal with life as it happens, but don’t let it get in the way of your overall goal (see tip #1).

10. You’re not alone. When you create and maintain a budget, looking your spending habits in the face can be very scary. But, don’t forget that budgeting is a work in progress. You’re bound to have weak moments and make a few mistakes. Take comfort in knowing that you’re not alone out there. If you make a mistake, learn from it! 

Best of luck in creating and maintaining your budget this year!