39% of Younger Americans Need Budgeting Guidance. Here Are Some Tips to Get Started
Not sure how to set up a budget? We've got you covered.
- Following a budget is a great way to avoid debt and meet financial goals.
- A recent survey reveals that many people need help setting a budget up.
You'll often hear that if you want to keep your spending in check and have an easier time meeting financial goals, then you'll need to follow a budget. But if you're new to budgeting, the idea of setting one up can be intimidating.
In a recent Fidelity survey of Americans aged 18 to 35, 39% of respondents admitted they could use some help establishing an overall budget. If you're in the same boat, here are three important tips to get started.
1. Rely on actual figures
The purpose of having a budget is to help you see where your money goes month after month, and to help you identify changes that could make it easier to spend less and save more (assuming those are your goals). Your budget will really only be useful if the data it contains is accurate.
To that end, take some time to review your credit card and bank account statements from the past six months. That way, you'll not only get a comprehensive list of your various bills, but you'll be able to get a good sense of what they actually cost you.
For example, you might think you normally spend $500 a month buying groceries for your family. But if you really spend more like $600 a month on food, incorporating that $500 figure could throw your entire budget out of whack, making it less useful to you. Basing your budget on accurate data is key.
2. Resist the urge to get fancy
You may be tempted to invest in fancy budgeting software to keep track of your expenses. For the most part, that's not necessary. All you really need to succeed at budgeting is a basic spreadsheet -- one that lists your various expenses and helps you compare your total monthly spending to the amount of money you bring home in your paycheck.
In fact, if you're a fan of doing things old school, you don't even need to bust out a laptop for budgeting purposes. You can list your expenses on plain old paper and use a calculator to make sure the numbers line up.
3. Use apps to simplify budgeting
While there's no need to spring for fancy budgeting tools, it could pay to take advantage of the numerous free budgeting apps that are out there. The great thing about some of these apps is they link your budget to your checking account and credit cards. Then, when you make purchases, your spending is assigned automatically to different categories so you don't have to manually update your budget.
Get started now
The sooner you get yourself on a budget, the easier a time you might have in managing your money. That said, a budget isn't something you can just set and forget. While these tips will help you get the ball rolling, be sure to carve out some time every few months to review your budget and make sure it's still accurate. That way, you'll really be able to make the most of it.
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