5 Tips to Living Freely Within Your Budget

Budgeting can either make or break your future. And while some may think a budget is restricting or limiting in some way, the fact is it allows you to experience the financial freedom that will enable you to do the things you want to do when you want to do them. But it takes some work to live within a budget successfully. Follow these five tips to start:

Tip #1: Be Flexible

Life happens, and that can throw your budget off a bit at times. For example, you may get sick and have to pay medical bills you didn’t anticipate or buy new tires because of a flat. A reasonable budget will allow you to move things around so you’ll have the money available for unexpected expenses. Another way to take care of these unexpected expenses is to build an emergency savings fund and make that an integral part of your budget.

Smart Advice: Open a savings account at Pinnacle Bank — then automatically deposit what your budget will allow each month from your paycheck. Even if you can only start with depositing $10 or $20 a paycheck, that will build a safety net over time.

Tip #2: Plan for Yearly Expenses

Many of us plan for recurring monthly expenses, such as groceries, utilities, loan payments, and more when budgeting. But we frequently forget to budget for yearly expenses, such as property taxes, insurance, income taxes, etc. Be sure to look at all of them when building your budget. Additionally, don’t forget things like birthday gifts, medical and dental out-of-pocket expenses, school supplies, and pet care, to name a few.

Smart Advice: Download your monthly expenses from Pinnacle Bank’s online banking to your favorite financial software program to get the up-to-date information you need to create a better budget.

Tip #3:  Track What You Spend

If you don’t know where your money is going, it’s impossible to stick to your budget. Keep track of every purchase you make by either saving your receipts or downloading your transactions from online banking to your favorite financial management software program. That way, you’ll know exactly where your money is going.

Smart Advice: If you choose to use a financial management software program to track expenses, download transactions daily or weekly to stay on top of your progress.

Tip #4:  Don’t Be Too Frugal

Think of budgeting like going on a diet.  If you are too careful and only do the minimum, you’ll binge at some point, throwing all your hard work down the drain. It’s okay to treat yourself occasionally — and you should budget to do so. You’re better off saving a little less once in a while rather than blowing out your budget because you’re miserable.

Smart Advice: Budget with how you live in mind. If you go out to eat often, consider limiting that to three times a week instead of four. Start small and then build. You’ll find the more success you have with small victories, the more likely you’ll stick to your budget.

Tip #5:  Avoid Impulse Buying

Whether big or small, an impulse buy can destroy your budget. And most times, people use credit to make larger impulse buys (such as a big-screen television or a car), which may alter a budget significantly — and for a long time. The best way to avoid impulse buying is to use the 48-hour rule. Make a list of pros and cons, and if after 48 hours you believe it’s still the right thing to do, you can feel more confident that it probably is.

Smart Advice: Ask yourself, “do I really need this?” before buying anything. Take note of the difference between your “needs” and your “wants.” And stick with needs when you’re trying to stay within a budget.

To learn more about budgeting or speak with an expert who can help you succeed, give us a call at 877-759-7939, or click here to set up an appointment at one of our branches. We’re here to help.