As everyone knows, effective budgeting is extremely important for any degree of financial security and balance in life, and the inability to budget effectively is often at the root of many different problems.

Of course, there are a lot of different budgeting systems, platforms, and approaches out there, in addition to a wide variety of financial streams that you might need to manage, whether related to Evolve Bank & Trust, investments of yours, or just your monthly paycheck.

Here are just a few tips for effective budgeting that you can get started with quite easily, and that might make a significant difference in your life.

Pick whichever budgeting system you are actually most likely to be consistent with

In some sense, it’s missing the point to get caught up in academic debates about which particular budgeting system might be marginally more effective than another. Ultimately, no budgeting system is going to be good for you if you don’t use it, and stick with it consistently.

In other words, you should pick whichever budgeting system you’re actually most likely to be consistent with, and ideally to even enjoy using.

For some, this might mean using a budgeting system with a broad range of different categories that accounts for everything from grocery expenses, to the amount of money you are setting aside each month for new T-shirts. For others, this might involve something as straightforward as a budgeting system featuring just the three categories of “needs, wants, and savings.”

Budget for the things you want, and not only for the things that you need

One area where people often take a wrong turn when it comes to budgeting, is with regards to their idealism about how they want to spend their money.

In other words, rather than trying to create a budget that also accounts for a certain number of self-indulgent expenses, the ambitious budgeter might create a spending plan that is completely “responsible,” and which leaves no room for dining out, going to the movies, or buying the occasional trinket.

Ultimately, though, you are human – which means that you will always spend some money on things that you don’t strictly need but that you just want. And, if you don’t, you’re likely pretty miserable as a result.

Be sure to include a category for “fun money” in your budget.

It’s usually best to budget with the money you already have

Many potentially good budgets are thrown off track simply because they focus on projected income, rather than the money you actually have available right now.

Generally speaking, it’s best to allocate different purposes to the money that is in your account or your wallet at this particular moment in time, and to then update your budget when more money comes in.  You can then save by incrementally “topping up” particular categories as your money accumulates.

If, on the other hand, you try to plan for the future, with money that hasn’t yet come into your accounts, there is a very good chance that unforeseen circumstances will crop up along the way that will completely undermine your plans. This only becomes truer, the farther ahead you try to project.

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