12 budgeting tips

12 Budgeting Tips to Help You Win With Money

You’ve started budgeting. Three cheers for you! This is a huge step—and the most important—in making those money goals a reality.

Maybe it’s going well. Maybe it’s hard. Maybe it’s somewhere in between. Wherever you are on the comfort-and-ease-of-budgeting scale, we’re always here for you. And we’ve got 12 solid tips at the ready to help the process run even smoother and the results get even better.  

1. Budget every month before the month begins.

To get ahead, you need to think ahead. This is solid life advice—and a superb first budgeting tip. You need a new budget each month. And you need to set that up before the month begins.

With EveryDollar, it’s easy. You can copy this month’s budget to the next, and then adjust where you need to. Think about the unique spending coming up (like your BFF’s birthday or that yodeling competition entry fee) and move money around to make room for it.

2. Budget to zero.

Why? Telling all your money where to go means you’re in charge of it—you own it instead of the other way around. Practically speaking, here’s how you create a zero-based budget:

  • Add all sources of income.
  • Type in your fixed expenses, like mortgage or rent, utilities, food and transportation.
  • Then type in common monthly expenses, such as restaurants, entertainment and clothing. Check your past budgets or bank statements to get an idea of what you typically spend.
  • Give every dollar a name, meaning all your income has a place in your budget. If there’s still money left after you’ve entered all those expenses, put it toward your current money goal, like paying off debt.

3. Track every expense.

Seriously. Every. Single. One. The impulse pack of gum. The drive-thru coffee on the way to work. The corgi-covered socks. Those things add up. Literally. $ + $ + $ = $$$. Tracking every expense is how you know where all your money’s going. Then you can start telling your money to go exactly where you want.

Know what makes tracking super simple and speedy? Ramsey+. With Ramsey+, you get the premium version of EveryDollar, which means bank connectivity, auto bank transactions, and more. All you do is drag and drop transactions into the correct budget lines. And you can try it out free. Like, right now.

4. Review your spending habits.

You have to get real with yourself. And you do that by reviewing your spending habits. That gum-buying routine, drive-thru coffee habit, or sock obsession could be costing you some serious money that would be way better spent on your current money goal.

Be honest with yourself about places you overspend. You either need to cut back or think about upping a budget line. But, remember,  if you spend more in one spot, you have to spend less in another. It’s the circle of budgeting, young Simba.

5. Set a realistic budget.

Like we just said, it’s okay to add some money into a line if you’ve been unrealistic with the planned amount. If you’re trying to save on groceries, for example, and you’ve done all the coupon clipping, meal planning, and BOGO shopping you can—but you’re still overspending each month—you probably need to up that grocery budget.

But remember, there’s no magic money tree dropping dollar bills into your wallet when you change a planned amount. Like a teeter totter of money, when one budget line goes up, another must go down. Tell your entertainment budget line you're sorry, but you need real food more than the mega-size popcorn at the movies.

6. Make adjustments.

So, as you see, adjustments will and must be made as you budget. Don’t freak. Lots of people think a budget is set and can’t be adjusted. But no way, friend. No way. This is your money. And you’re the boss of it. That’s what a budget does. It puts you in charge.

So we already said you’ll need to adjust when you realize you started with unrealistic expectations. You’ll also need to adjust when a bill is more or less than what you planned. Moral of the story is: Don’t be afraid to make adjustments. Just keep the goal of spending less than you make (overall) a key objective. That’s how you win with your money.  

7. Create a “Miscellaneous" category.

We’re not elephants. We do forget. Your kid’s school fundraiser. Your $2 portion for that co-worker’s birthday cake. Your anniversary. (Yeah. Don’t forget that.) You might be surprised when these things pop up, but your wallet doesn’t have to be. Make room in your budget for the little things that slip your mind by creating a “Miscellaneous” line with $50 or so in it.

8. Budget for annual and semi-annual expenses.

There are some things that really shouldn’t be a surprise hit to your budget, though, even though they don’t come every month. We’re talking about those annual or semi-annual expenses like car insurance, your pet’s yearly checkup, your anniversary (because—seriously, you should be ready for this). One perfect option is to set up a sinking fund for these kinds of expenses. This way you can be saving up month by month for the day that expense is due.

9. Save for big purchases a little at a time.

Another great thing about sinking funds is you can use them to save up for big purchases. Be prepared for new tires by being watchful of the treads on all the wheels. Save up for Christmas all year long since you know it’s coming December 25. Pay cash for that new digital camera to take your photography hobby to the next level (or create a new side hustle). You do all these things by setting up sinking funds in EveryDollar and setting aside money each month for that big purchase.

10. Budget for fun.

We don’t mean to budget for the fun of it—though we think budgeting with EveryDollar is quite fun. We mean put in a budget line for fun things. All work and no play make you a dull, angry, frustrated, back-sliding budgeter. Of course, don’t go crazy. But there are ways to have fun and even reward yourself on a budget. And it’s easier to stay on track when the track offers one fancy coffee a month, extra foam, hold the guilt.

11. Understand the difference between needs and wants.

Speaking of fancy coffee—we all know that’s a want and not a need, right? Yes. We do. But other lines can blur. If your shoes are literally falling apart, you need new shoes. But that red vegan leather moto jacket—that’s a want. We budget for both, but needs get the priority.

12. Give yourself grace.

You will make mistakes. We all do. And it generally takes three months before you get the hang of this budgeting thing, so be kind to yourself—both at the start and throughout your budgeting lifestyle.

Because that’s what this budgeting stuff is—a lifestyle. And it’s the best kind possible: the life doesn’t control my money—I DO! daily decision to make better money choices.

You’ve got this. We mean it. You just need a “Yeah I can!” attitude and an EveryDollar budget.

And you can get that premium version of EveryDollar today by starting your Ramsey+ free trial. Then start doing these tips so you can start rolling in cash* and confidence.

*Don’t expect to start literally rolling in cash during your first few months, or even your first few years. That takes time. Scrooge McDuck didn’t build his money bin in a day, after all.