There is no single, magic formula for successful budgeting. There are, however, a few less-than-obvious tips and tricks you can follow if you find you're struggling to keep your spending and your earning in line. It all starts with this one important rule: Keep it simple. Forget all of the complicated stuff and go back to the basics.
Create your own personalized budget
Begin by writing down every bill and expense you have. All of them. Every single one. This step is necessary when creating a personal budget. You can create the budget however you like - super complex or very simple, it's up to you and your personal preferences. Just be sure to be thorough. Once you start leaving items off your budget because they're small or irregular, you risk putting yourself in a bad position.
Keep track of the expenses you have coming up
Always try to keep your eye on the horizon. What's coming up? It's important to always be looking ahead so you 1) don't miss a payment and find yourself with unnecessary late fees; and 2) so you can pivot your budget if needed.
If you get paid every two weeks, why not create a budget every two weeks?
For many people, it’s a lot easier to create a paycheck budget, rather than a monthly or yearly budget. And that's fine! Things change throughout the month and short-term budgeting can make things simpler. Again, just make sure you're aware of any major, irregular expenses on the horizon, so you're not caught short on funds.
Make sure every dollar has its place
If your paycheck is $500, make sure you’re only budgeting for $500. You can start by allocating money toward my upcoming bills (fixed expenses), then setting aside an amount for savings, with some left over for entertainment and other non-necessities.
Plan for periodic expenses
You can still plan for irregular expenses using a short-term, paycheck-to-paycheck budgeting system - you just need to be diligent and plan ahead. When a holiday is on the horizon, consider how many paychecks you'll receive between now and then and how much you'll be able to comfortably dedicate from each of those paychecks for holiday-related spending. Then be sure not to out-spend your calculations.
Continually track your purchases
Even with a budget and the best of intentions, things can still get away from you. It can be really helpful to continually track and record all of your purchases. This way you can verify that information against your bank statements and bills. Recording your spending tends to have a psychological effect as well. You start to think more critically about your purchases, especially the seemingly minor ones that add up over time.
If you feel like you could use a little more direct help putting together a realistic budget and sticking with it, pick up the phone and talk to one of our trained budgeting experts. They can show you solutions that fit your unique situation.
This is an updated version of a post that originally ran in 2011.