When you're new to making a monthly budget, you're likely going to make some mistakes. You'll get better and better each month - trust me!
Here are some ideas on how to avoid the most common personal budgeting mistakes.
Budget some pocket money, even if it's just $5.
Whether you're on a self-imposed or a required tight budget, it's important to give yourself a little personal spending money. This doesn't have to be a big amount. It can be $5 or $10. Having a small bit earmarked for unplanned purchases can help you avoid any guilt for getting a coffee or a snack when it's "not in the budget to eat out" but you forgot your lunch or ran late and didn't make your coffee at home. Also, a $5 magazine or bargain book can really relieve a little of your stress if you're on a tight, tight budget (trust me, I've been there).
Don't expect a perfect turnaround in one month.
Going from spending $700 on groceries and food in a month down to $300 may not happen overnight. It might take two or three months to work out the kinks and get there. Heck, you may discover that your newly targeted "food" line item was too restrictive and wasn't very realistic after all. Try to hit it, definitely. But do give yourself some grace if it takes a couple (or a few) months to get there. It will take some practice and you'll get better as you go.
Set up the "bill pay" service at your bank or credit union.
This feature should be free. If it's not, shop around for another bank or credit union. It's one of the easiest ways to pay your bills, and you don't have to worry about stamps, checks and the mail service. You can set most bills to go electronically to this system, and you can even get alerts when a new bill arrives. Simply click to the feature, set your payment amount and the date it's due, and you're done!
Try to manage your money from one place.
Speaking of accounts, it's easiest to keep track of your money if your checking and savings accounts are at the same financial institution. If you're doing this as a couple, move to the same bank. Also consider merging your money and your spouse's funds into one joint checking account. If you really want to keep your separate accounts, you can - but add each other's names as authorized signers.
The less complicated the setup, the easier it will be to manage your funds and make sure the money goes where it's supposed to. Just think of the back and forth transfers you could avoid if it's all in one spot. Also, when everything's connected, that "bill pay" option will likely give you the choice of which account pays each bill on a monthly basis. This can be helpful if one of you is low on cash or has an unexpected bill pop up that the other can cover.
Play to your strengths.
If one of you is "type A" and the other gets anxiety over money details, let the type A person manage the monthly budget with the "type B" signing off on the overall plan. Just hold each other accountable for what you agree to do!
Keep your budget meetings regular.
You might even turn your budget check-ins a "date!" Send the kids to bed and do your check-in over dessert or a glass of wine. You could also make it a true date and pop out to a coffee shop for a budget-friendly $10 or $20 coffee date. But DO IT. You might find you need to touch base once a week at first, or maybe twice a month. Once you really get this ball rolling, you might be able to do just one mid-month budget meeting and then work on the next month's budget toward the end of the month.
Whatever the schedule, make sure it's with a regular and appropriate frequency for where you are in your journey. Checking in with a budget date will help you catch slipups and course correct before you've accidentally overspent by a LOT.
Be ok with making adjustments and fine-tuning as you go.
You're striving for progress in this whole plan. You won't be perfect at first, and that's both expected and completely normal! But it gets better in month two, even better in month three, and then in months four and five, you really start to get this thing humming along. Again, give yourself some grace.
Align your budgeting medium with your personality.
Some people love putting pen or pencil to paper and doing a budget on paper. Others prefer an app. If you've tried an app and it's just not working, give paper a try. Likewise, if you can't remember to grab that notebook but your phone or computer is always in hand, by all means go with the more tech-friendly option. Some of us like the reassurance that our math is always done with a calculator and is less prone to errors. Find what works for you.
I hope these tips are helpful as you're starting to budget. Remember, it's all about making progress, not being perfect. Before you know it, you'll be practiced and this will start to feel second-nature.