Budgets can be used for many purposes in a personal finance framework, including paying off debt, managing wealth, and padding retirement accounts. However, many people find the process of creating or sticking to a budget difficult, frustrating, and perhaps a little annoying. 

This is not an unusual sentiment. In fact, only two out of every three households choose to budget their income monthly. This percentage of use goes down as populations age, making budgets a highly suggested but infrequently implemented practice. 

It is important to remember that the goal of a personal budget is not to restrain financial freedom, but to liberate consumers from the uncertainty surrounding their funds.  

What Does A Personal Budget Look Like? 

A personal budget is at minimum three things: 

• Specific and detailed 
• Simple to read and easy to understand 
• Personally unique to the creator 

At its core, a personal budget is a list of estimated expenses and incomes over a certain period. For simplicity’s sake, many choose to set this period over an average month. 

Personal budgets succinctly illustrate the average cost for your lifestyle, and are a helpful planning tool for those looking to save for college, pay down debt, or invest in their retirement plans. 

Budgets should not be used as ballpark estimates, but as guidelines that shape the direction of your monthly, weekly, and even daily spending habits. Having a clear picture of your current financial state is an excellent way to prepare for higher expenses, future situations, and long-term purchases. 

6 Budgeting Tips For Any Kind Of Budget 

No matter the total amount of your monthly budget, the following six budgeting tips are relevant to your personal financial journey at any stage of life. When used correctly, a strong personal budget can and will lay the foundations for a promising and financially independent future. 

1. Stick To A Schedule 

At the end of the day, your budget will only be as functional as it is accurately followed. Try to adhere to your budget on its particular schedule, taking care to map out your finances for exactly the set amount of time provided. 

Many individuals find using a month-long period works best for calculating recurring bills such as rent, water, and electricity. Schedules can be determined using the creator’s average pay cycle as well. 

Once you have established your budgeting timeframe, refuse to divert from the schedule. The less you stray from the budget, the more it can do for you. 

2. Get An Accountability Partner 

Having a friend or family member act as a financial accountability partner can be a great way to focus your attention on the wealth-building goals that matter to you. 

Valid accountability partners may include just about anyone, such as: 

• A spouse or partner 
• A close friend 
• A co-worker 
• A peer  
• A financial coach/advisor 

With someone to hold them accountable for budgeting decisions, consumers are more than 65% likely to meet their initial goals. If regular meetings are held with their accountability partners, the success rate increases to nearly 95%. 

3. Go From Most To Least Important 

When dealing with a budget that consists of several complicated payments, consider paying expenses in order from most to least important. 

Write out the bills that are necessary for your survival. Paying for a roof over your head, food and water, and electricity for heat and A/C should be on top of the list. Next, consider the bills that are less necessary, or perhaps not necessary at all. Paying for monthly subscription services, fast food, and movie premieres are certainly fun, but they are not required for survival. 

Following this rule, pay down your budget in order from most to least necessary, ensuring you will have the funds for each item on the list. 

4. Use A Base Zero Budget 

Instead of budgeting so that money is ‘left over’ each month, consider adding higher limits to each category line until your income is reduced to zero. 

Not only does this provide a significant margin, but it secures you from emergencies as well. Any funds left over from the previous month can be invested, taken out in cash, or even added to the budget category for the next budget. 

5. Track All Expenses Accurately 

It may be easier to round your money, but the fact is that all expenses should be tracked with high precision within the first few months. This will establish a healthy budgeting baseline. 

Once you have been using a budget for some time, rounding finances is no longer discouraged. Some budgeting apps round each of your payments to the nearest dollar, using the change to invest in an account of your choosing. Over time, this can amount to several hundred dollars per month. 

6. Revisit Your Budget Every Month 

Budgets should be an accurate reflection of your spending, saving, and overall lifestyle needs, and should be updated regularly. 

Consider the life milestones you have had or will have before your next budget. Will you still be making payments on your current vehicle, or lowering your debt? Carefully consider the answers to your financial questions, and reflect these in your personal budget.  

Maximize Budgeting Tips With Bank Accounts That Matter 

Perhaps the most effective budgeting tip of all is understanding what your bank accounts can do for your money. Allowing your hard-earned finances to stagnate in a low-interest savings account or certificates may ultimately harm rather than help the contents of your wallet. 

Belco Community Credit Union is proud to assist hundreds of members with their personal financial goals, from car loans and mortgages to high yield savings accounts. 

Ready to revolutionize your personal finances? 

Learn More To Make The Most Of Your Money With Belco Community Credit Union