Simple Ways to Start Budgeting In 2022

“I don’t want to be better with money,” said no one ever. Whether you consider yourself a spender or a saver or somewhere in between, the odds are, you’d like to have money left over at the end of the day. Sixty-five percent of Americans are considering a financial goal for the new year, with forty-four percent saying that saving money is their number one financial resolution (and speaking of New Year’s resolutions, we have a few tips for making them stick).

You might be thinking, “How does anyone get started with a budget? How do I save without giving up everything I like? How much should I be spending each month?” We’ll answer these questions in five steps.

1. Define your saving goal.

Are you planning a big purchase? Building an emergency fund? Paying down a credit card? Pick something you want to achieve in the next three months as a short-term goal, with a long-term objective. Knowing why you’re saving helps you strategize and stay motivated.

2. Track your income and expenses.

Look at your finances over the last three months and compare your take-home pay against your spending. Now separate your expenses between what’s fixed like rent and loan payments and what’s flexible, like food and clothing. The flexible expenses are where you’ll find opportunities to save. For more on how to save, check out our blog post on quick ways to cut back your budget.

3. Set priorities to cut back on spending.

If you’re a foodie, you may not want to give up dining out. If you’re training for a marathon, a gym membership might be a must-have. But you may be willing to cut back on subscriptions or new clothes. Moderation is key to living within your means without getting stressed.

4. Pick a budgeting strategy.

There’s more than one way to do it. You might have read about the 50/30/20 budget: 50% of our take-home income goes to “needs” like rent, gas, and groceries, 30% to savings and 20% to “wants” like new clothes or dinners out. Some people might consider the envelope system such as putting cash in envelopes marked “groceries,” “clothing,” “bills,” etc., and that’s all the entire budget for the month. There’s no set system that works for everyone so search around to find what’s best for you.

5. Watch your spending and stay accountable.

Using a budgeting website or app can help you stay organized by linking to your bank and credit card accounts, generating spending charts, and sending customized alerts. You could also enlist friends or family to help you stay accountable (and they’ll understand when you must decline dinner invites). Look for reputable websites, social media accounts and podcasts that specialize in personal finances. Finally, don’t forget to sign up for the Gerber Life Family Times Newsletter for money tips delivered to your inbox monthly.

Ultimately, these are five ideas to help you get to a budget that works. It‘s about recognizing what you really need and putting your money towards what truly makes you happy. Best of luck in the New Year and keep checking this blog for more money tips!!