Making and maintaining a budget is an essential part of a healthy financial life. If you struggle to stick to your budget, or have trouble getting started with a budget in the first place, the first step someone may take is simply typing in “help with a budget” into a Google search bar. Or, if they want a little more help, start looking for a local financial advisor by typing in something like “San Antonio financial group help with budget.” This will likely result in a plethora of information – some helpful, some canned. If you’re really looking to create a budget, and more importantly, to stay on course, we’ve compiled the following 8 time-tested helpful tips for getting started.

1. Be Realistic

If you truly want to create a budget that you can follow, it’s crucial to be realistic. For example, if you have unattainable savings goals, you might get frustrated by continually coming up short and get discouraged. Or maybe you’re not accurately allotting enough money for your regular expenses, so you’re consistently overbudget in that area. Perhaps you have a habit of buying lattes two to three times a week, but you never figure that into your budget. By not being realistic about how you spend your money, you will never have an accurate, realistic budget that allows you to meet your obligations as well as contribute to retirement and savings accounts.

Do you have a true understanding of your income and expenses? Download this cash flow worksheet as a guide to help you get organized.

2. Don’t Cheat Yourself

If you have a budget that’s too restrictive, you’re less likely to stick to it long-term. Without allowing the occasional treat, such as a weekend away or even something special that’s been on your wish list for a while, you may end up feeling like you never get to enjoy the fruits of your hard work.

Instead, build in milestones for yourself. For example, if your goal is to create a $10,000 emergency fund, set a “reward” every time you reach another $1,000 toward that goal. These can be small rewards, but enough to motivate you to keep working toward that goal.

3. Review Your Budget Regularly

A good rule of thumb is to review your budget every three months – or quarterly. By reviewing your budget, you can make sure you’re staying on track. If you’re struggling to maintain your budget, taking a hard look at your spending habits might be required. You may also notice where you can cut costs by prioritizing.

In addition to regularly reviewing your budget, I also recommend taking a close look at your income and debt if and when you experience a substantial life change, such as a new job or living situation, a divorce or marriage, having a child or any other significant life event.

4. Get On the Same Page

If you have a partner who you share expenses with, it’s essential that you both understand your budget and agree on it as well as your overall goals. This is especially important if you keep separate finances, but both contribute to living expenses or other common household costs. Even if you maintain separate personal budgets, there should be a joint budget for those shared expenses, and I recommend reviewing it together. If it’s not reviewed together, one person may blame the other for shortfalls and friction can occur.

Sadly, financial issues are one of the most common causes of divorce. To avoid this, it’s important to talk about finances before any issues arise. If money is an uncomfortable topic for you and your partner, discuss your financial plan together with a financial advisor. Having a financial advisor in the room can help relieve tension.

5. Keep Track of Every Penny

Using round numbers or estimating can be a dangerous game and can be a source of costly mistakes or overdraft charges. Plus, keeping track of how much you spend on absolutely everything can open your eyes to just how much money you spend on unnecessary things, such as eating out or online shopping.

You also may realize you have been missing opportunities to put more money toward savings or even a large purchase such as a house or vehicle. This can be done by using an “old-fashioned” checkbook, or one of the many budgeting app tools available online. We have a worksheet that can help you categorize every penny. However you do it, be sure to categorize your expenses so you can see the big picture of how much you’re spending in each category and where you can cut back.

6. Realize That Not Every Month Will Be the Same

When building your budget, be sure to include seasonal costs. For example, in the fall, there are often costs for back-to-school supplies and clothes. And of course, the holidays come right after that. Make sure you consider any travel expenses and/or larger-than-normal grocery bills for special meals and houseguests?

Beyond gifts, the holidays can be especially costly. In the spring or summer, you may be planning a family vacation or sending the kids to a special summer camp. There’s also holidays like Mother’s and Father’s Day, Halloween, birthdays and Thanksgiving. And don’t forget about any sports or hobbies that you and your family are involved in.

Whatever your life looks like, you can plan for the seasonal costs by building them into your budget from day one.

7. Keep an Eye on Your Debt

If your budget doesn’t include paying off debt, it’s time to take a closer look at the numbers. While there are certain expenses that you can count on being part of your budget, such as utilities and food costs, debt doesn’t have to be one of them. If you can find any ways to cut costs and apply that savings toward paying off your debt, you can make a large impact over time on the amount of interest you pay on that debt. This is especially true for high-rate credit cards or the seemingly ever-present student loans.

8. Expect the Unexpected

A budget should be much more than just money in and money out. I believe it should also include your savings and retirement goals, and much more. If you build your budget so you’re spending every dollar as soon as it comes in, you’re living paycheck to paycheck and haven’t built yourself any wiggle room.

While you may have an emergency fund, and even a savings account, you don’t want to build your budget so tight that you can’t handle even a minor unexpected cost, such as a flat tire or a higher-than-normal utility bill. These expenses may not meet the criteria for a financial emergency, but could throw off your budget nonetheless, so it’s good to be prepared for such things. If nothing happens in a given month and you end up with a surplus, you can put that toward other goals.

Putting It All Together

Making and sticking to a budget can be intimidating and overwhelming, but it doesn’t have to be. A financial advisor can help!

This material is provided by PAX Financial Group, LLC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The information herein has been derived from sources believed to be accurate. Please note: Investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.

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