Budgeting Tips

• Track the cash. Many times, the largest expense category in a family's budget is "miscellaneous." This is why financial planners recommend carefully tracking the cash you spend for at least a month or two. You might be surprised at how much money you actually spend this way.




• Practice with short-term goals. Budgeting for a short-term modest-expense goal is considered good practice by financial planners who believe it can help people to work toward more expensive long-term goals. The signs of progress you begin to notice will motivate you to continue.

• Spend from sub-accounts. It is sometimes helpful to establish savings sub-accounts, such as a vacation account, a car account, an education account, or a retirement account. You're less likely to overspend if you have several sub-accounts, as opposed to one large account.

• Automate. If you can, have your regular monthly expenses, like your mortgage and your car payment, paid automatically from your checking account. You already know that money is coming out, and it is one less thing to worry about come time to pay your bills.

• It's ok to cheat ... sometimes! Let yourself spend a little more than you'd planned every once in awhile. A small amount of splurging here and there won't ruin your budget, so don't feel guilty.

• Look for signs. Regardless of how detailed or broad you are with your spending plan, there's a simple way to make sure it's working. Ask yourself if you are increasing savings and decreasing debt at a good pace. If you are dipping into your savings and investment accounts to meet your needs, consider revising your plan.

• Check in now and then. Like all aspects of your financial life, you should check in with your spending plan every so often to see if it's still meeting your needs. Major changes in your life may require you to make some adjustments.

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