6 Tips For Effective And Stress-Free Budgeting

Most people live from paycheck to paycheck and never have enough to save. This is mainly due to overspending, insufficient budgeting and lack of planning. Here are 6 tips for effective and stress-free budgeting.

Understand the goal – The goal of budgeting is not only to track where your money is going, it is to help control spending. Therefore, have a clear goal in mind and give it a value. This will be your target for the next couple of months.

Track spending for a week – Start by tracking your spending for a week. You will need to track every dime; to know how much you will need to budget for each area of spending.

Use the 3-category budget – In a perfect world, we would budget all areas of our spending. But since this involves a lot of time and work, focus on 3 categories that you feel you in control over, for example, this may be eating out, shopping for clothes or your grocery bill.

Use your credit card – Paying for items on your credit card is a good way to track your spending.

Save first – Remember to save money as soon as you get paid. That way you are certain of how much you have to spend for the month. Try to put your savings in a savings account, where you don’t have access to an ATM card.

Try the 50/20/30 Plan – Budget by categorizing 50% of your income for necessities, 20% to long-term savings, and 30% to lifestyle choices.