Budgeting may not be the most exciting thing you’ll do in your lifetime, but it’s an important step on the road to becoming financially secure.
By following a realistic budget, you’ll have a good sense of where your money goes every month and what your different living expenses cost. From there, it’ll be easier to build savings, avoid debt, and sock money away for your life goals, like buying a home or starting your own business.
Around 27% of respondents said they found it challenging to stick to a budget, according to a recent Personal Capital survey. If you’ve had similar struggles, here are three tips that might help.
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1. Don’t just guess at your budget numbers
One reason why some people fail at budgeting, or have a hard time keeping up with it, is that their budgets aren’t based on actual spending data. Rather, what they’ve done is guess at their various expenses rather than see what they actually entail.
Budgeting could become far less tricky if the numbers you use in your calculations are more realistic. Simply take a look at your bank and credit card statements from the past year. Then, use those figures to map out your budget. Doing so could make for a less frustrating experience.
Read more: 4 Signs Your Budget Has Gone Bad
2. Update your budget as needed
If you’re following the budget you set up three years ago, you may be setting yourself up for failure. Living expenses and income can change significantly over time. That’s why budgets often need to be updated.
It may be the case that you used to spend $600 a month on groceries, but maybe now you’re spending $650 a month because your tastes and cooking habits have changed. Or maybe you’ve given up the gym and are no longer paying the $45 a month that was pulled directly from your checking account.
Make an effort to keep your budget …….