19 Budgeting Tips to Help You Take Control of Your Money

A budget is a plan for how you spend your money, and these budgeting tips will help you put your money in all the right places.

The word budget gets a bad rep sometimes – people think budgets are boring or restrictive.

But a good budget will help you reach your financial goals, plan for fun, and let you take control of your money, all of which are powerful reasons to keep a budget.

I realized how important budgets were when I was paying off my student loan debt. I had to make a plan to make sure that I was using my money effectively, and it worked – I paid my debt off in 18 months.

My budget has changed a lot since then, but I still keep one because I know it’s how I’ll stay in control of my money.

So if you want to pay off debt, start saving for retirement, stop living paycheck to paycheck, these budgeting tips will put you in control of your money.

19 budgeting tips to help you take control of your money

1. Know your goals

What you do with your money this month will affect how you’re able to use your money next month, next year, and in 10 years. So think about your goals when you sit down and create your budget.

I had a goal of paying off my $40,000 student loan debt as quickly as possible. I used a budget to show me where I needed to cut my spending and how much extra money I needed to make to pay off that debt ASAP.

My budget helped me destroy my student loans in 18 months.

You can plan for any kind of goal, like going on an annual vacation, retiring early, buying a house, getting out of credit card debt, etc. You’ll need to figure out how much you need to find in your budget for your goal, and then treat each goal like a bill you pay on a regular basis.

2. Make a budget with your partner

3. Be realistic

I brought up goals as the first of these budgeting tips, but here’s the thing: be realistic about those goals and the rest of your finances. Here’s what I mean:

• Understand that some goals will take longer than others
• Be honest with yourself about how much you’re spending – everything goes in your budget
• Be honest about how much money you make
• Realize that sticking to your budget can be hard at times
• Account for surprises, because we all know they happen

The best budget for you is a realistic budget.

4. Check the calendar

When you sit down to write out your budget, check the calendar to see if there are any birthdays, holidays, anniversaries, weddings, date nights or other planned events that will require some extra spending.

Double checking to see what’s coming up in the next month or two is a budgeting tip that will help you stay on track with your spending. You’ll have time to make adjustments before you have to cancel plans, draw from savings, or put something on a credit card.

5. Stop using the word “budget”

A lot of people think the word budget always means cheap or boring. When it’s describing something, budget just means inexpensive, and that’s not always a bad thing.

But if the word budget bothers you or feels too restrictive – even intimidating – then use a different word.

The term “spending plan” makes sense, because that’s exactly what you’re creating when you make a budget.

6. Prioritize your bills

One of the most important things is to figure out which bills are essential and which aren’t. This is identifying your wants vs. needs, and it’s important to remember when you’re in the budget planning process.

Food, shelter, basic clothing, transportation, debt repayments – those are needs. Wants are extra.

You can start to pick at those needs a little bit, like is a brand new car a need? Probably not. Does eating out every night qualify as a need (it is food)? No.

When you make your budget, account for your needs first. The wants are important too, but they should be secondary.

7. Focus on paying off your debt

8. Use sinking funds

A sinking fund is a strategic way to set money aside for upcoming expenses. You’re saving to spend.

This is one of the budgeting tips that many of my readers practice. And they’ve told me that they create sinking things for all sorts of things: vacations, car insurance deductible, clothing, new electronics, medical care, things for their kids, etc.

Here’s how a sinking fund works:

• Every month you save money across several categories, knowing that you’ll use the money at a later date
• Use a separate savings account or money market account for each fund
• When you’re ready to spend from a category, money is already there

You don’t have to pull from your emergency fund, use a credit card, or go without.

9. Create an emergency fund

10. Budget for fun

Some people actually do nerd out for budgets, but that’s not what I’m talking about. Your budget should make room for some fun spending.

Even when I was living the ultra-frugal life to pay off my student debt, I occasionally let myself splurge on something small – usually a cheap, but nice, bottle of wine as a reward for some kind of debt milestone. The reality is that spending money on yourself feels good.

You can give yourself an allowance each month to use however you want. Most of my fun money goes towards golf these days, but do what works for you. As long as you’re being responsible and taking care of your essential needs, you shouldn’t feel guilty about your fun money.

11. Use separate accounts

There’s no rule that says all of your money needs to be kept in one account, and one of the best budget ideas for many people is to have multiple bank accounts.

I brought this up earlier when we talked about sinking funds. Just like an emergency fund should be kept in a separate savings or money market account, you can also have a separate account for your spending money or grocery budget.

Using separate accounts for different budget categories can help you organize your finances and stick to your budget.

12. Take advantage of direct deposit

Most people already have direct deposit set up on their paycheck, but that doesn’t mean it all needs to be deposited into one account.

One of the budget ideas you can use direct deposit for is splitting your money between some of your separate accounts. Automating the process removes a step and makes your life easier.

13. Use a budgeting app

14. Find a budgeting method that works for you

You can keep things simple by creating a basic budget in an Excel spreadsheet that tracks your expenses vs. income. The goal being to spend less than you make.

But there are different budgeting strategies that might be a better fit. Some give you more guidance or may work better with your personal finance style.

Here are two of the most popular budgeting methods:

• Zero-based budget: You start with how much money you make and allocate every last penny down to zero. You’re accounting for every single cent of your income before it’s even spent. This is sometimes known as the Ramsey budget because it was made popular by personal finance expert Dave Ramsey.
• 50/30/20 budget: This is a budget planning concept in which you allocate 50% of your income for needs, 30% for wants, 20% for savings and debt.

15. Don’t forget about semi-annual expenses

Insurance premiums, registration fees for your car, and taxes – these bills don’t come up every month, but you still need to plan for them on a monthly basis.

You can use last year’s payment to estimate how much your upcoming payment will be, and then set a savings goal each month so you have enough saved when that bill is due.

16. Try a cash budget

A cash budget is when you withdraw cash from your bank account and set it aside for different expenses. It’s sometimes called the envelope budget.

In theory, you would have an envelope for groceries, going out to eat, gas, clothes, and anything else you can pay for with cash. You can even do a hybrid version where you pull out cash for the spending categories you struggle with.

This is one of the budgeting tips that works well for people who need a physical reminder of how much they can spend. Cash is tangible, so you’re seeing exactly how much you have available.

17. Find ways to save money

Some people are really surprised when they sit down and start tracking their expenses. I spend how much on streaming services!?

Fortunately, there are lots of ways to start cutting your budget to make room for more important things. Here are a few ideas:

• You can get rid of your car payment
• Find a less expensive cell phone plan
• Finally stop paying for cable
• Meal plan to curb your grocery spending
• Use an app to negotiate your bills

18. Increase your income and put it to work

19. Adjust your budget as needed

The final word on budgeting tips

Don’t give up on budgeting if you’re struggling to make it work. There are many different kinds of budget, budgeting apps, and ways to approach spending and saving. You need to find something that works for you.

Some people take a really flexible approach and keep the amount they need for high priority bills in one account, and any extra money can be used how they want. That’s not as organized as some budgets, but it still works.

It’s your money, so find a budgeting plan that works for you.