Consider The Envelope Method
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The envelope method is a classic one, but you can add a modern twist to it. Before getting to that, it’s worth explaining the envelope method overall. It’s a method that’s best for detail-oriented people. The idea is that you have envelopes for each category of your budget. You’ll then fill that envelope with the appropriate amount of cash at the beginning of each budgeting period.
Similar to the previous method, once the money from that envelope is gone, you’re done spending in that category. This method overall can be difficult to stick to and the first few months can be very rough.
A modern approach to this method is that instead of envelopes, you create various bank accounts. You can either have them with a single bank or stretch them to multiple banks. The choice is yours.
Reassess The Budget
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After making a budget and sticking to it, it doesn’t always mean you need to stick to that plan for the next decade or two. Things change. You get a raise, rent increases, you find some better side-gigs that pay you more, and so on.
Changes like these force us to have a change in our lifestyle and, thus, a change in how we spend our money. These could potentially derail any or all of your saving and budgeting efforts.
With that in mind, instead of making a one-and-done budget, make an effort to check your budget every few months. Are you still spending within the limits? Have you noticed you’re spending more or less money in certain areas?
The key is to be honest with yourself and to make adjustments based on the shifts in your life. If you get married or get a promotion or a raise, you want to reassess your budget and make sure it still stands as reasonable for you.
Budgets aren’t meant to be fixed and restrictive. They are fluid like your life and as long as they flow with you, you can move closer to your financial goals and freedom.
