How to make a budget, according to money experts

The one guarantee in life is that nothing stays the same. It’s important in your plan to outline the potential life changes that you’ll want to budget for. Consider events such as:

Having a baby

Kids going to daycare, school or university

New auto loan or mortgage

Getting a raise

Taking on a roommate

Helping elderly parents

Helping adult children

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With life’s changes, sometimes your goals have to change as well. With a baby on the way, plans for a holiday may have to give way to renting a bigger apartment. If you have a spouse, make sure that you have this conversation together and determine your joint priorities. Get on the same page with significant decisions such as financing your kids’ education, helping out a parent in need, or taking on additional debt.

If reality throws you more than you think you can handle, just take a deep breath, relax and reset. It’s more about consistency than the ups and downs. Consistent budgeters and savers do much better over the long term than those who are in and out of the commitment. It’s the same with exercising and eating right: consistency is king.

Read on for the habits of cheapskates you can follow to save money.

Write down your post-tax income and your realistic savings goals. Then, when you collect your income, take the savings you’ve chosen and bank or invest it. Simply spend what’s left over. Adjusting your life to fit your savings goal is another way to make the budgeting process work.

Says Aliche, “If you’re not ready for a full set of discipline, try the ‘Pay Yourself First’ budget. I remember when I had no money, just setting aside $5 in a savings account every pay period helped. I wanted to get out of the thought of ‘I don’t have.’ I had to acknowledge it is about habits, not necessarily amounts. You have to start somewhere. Then I set aside more as I made more.”

It’s OK to treat yourself every once in a while… as long as you have a plan to make up the shortfall (and go through with it!). Who doesn’t like being naughty every once in a while? Says Saranovitz, “It all comes down to determining the priorities in your life and what will make you happy. We suggest that going without a few shiny things and being a better penny pincher, or budgeter, or saver, will go a long way toward happiness, too. Don’t give in to the ‘BUY ME, SPEND MORE, TAKE MORE CREDIT’ messaging that plagues our society.”

“I named my future self ‘Wanda,’ who is me at 80,” says Aliche. “I think about her a lot. You wouldn’t put your grandma to work. Think about having to put yourself to work when you’re 80. You should do what you can now to make sure your 80-year-old self doesn’t have to work!”

If you’re in a relationship, open and honest communication around money is the best policy. For couples, a recent survey shows finances were a greater source of relationship tension than sex, according to 68 per cent of respondents. On the flip side, a 2015 Money magazine poll found that across the generations, couples that have greater financial trust in each other and fewer money conflicts reported having better sex lives. Who knew budgets could be so sexy?

If you’re in a relationship, both you and your significant other should each have some money to spend any way you want, no matter how small and without guilt. Make sure to budget for this ‘play pay,’ and enjoy it!

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Source: RD.com