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Make 2018 the Year You Actually Commit to a Budget

The word “budget” causes anxiety for many of us because of its negative connotation. The thought of it may make you over-examine your spending habits, feel like you have to cut back and pressure you into implementing more frugal ways. This can feel overwhelming because no one wants to have to worry about these things, but in reality, if you don’t, you could lose control of your financial future quickly, and the road back on track is not a fun one.

If you’re on a budget, you’re simply aware of how much money you spend and should spend each month on living expenses, entertainment and other things. It’s important to understand where your income goes in order to properly budget. If you continue to spend without this understanding, you will likely save nothing, and you set yourself up for a potential financial disaster if you unexpectedly lose your job, get into an accident or face another unplanned obstacle.

The main reason to commit to a budget is to save money. Many people do this by following the 50/20/30 rule, which breaks down like this:

  •          20 percent of your monthly net income should go toward paying down debt or savings
  •         50 percent is reserved for essentials like rent or mortgage, utilities and food
  •          30 percent goes toward personal care, entertainment and other miscellaneous expenses.


Using the 50/20/30 rule as a guide, here are five tips you should keep in mind when you commit to a budget.

1. Categorize Your Current Expenses

You can’t control fixed expenses like your mortgage or rent, cellphone bill, loans and other debt. Utility bills and food expenses are not fixed expenses, so cut back on these two items if you can to save money. Use your fixed expenses as the foundation of your budget, as you will have to design it around them, along with your monthly income.

So first things first — jot down your monthly income so you have something to start with. Next, write down any fixed costs you have, excluding utilities and grocery expenses — these will be considered other expenses. After that, note your seasonal expenses, like summer camp, dance classes, vet visits and so forth. Then identify any other expenses.

Once you calculate your expenses and total spending, subtract that number from your total monthly income to see how much extra money you have leftover at the end of the month.
Now you’re ready to set your financial goal and establish your budget based off of the 50/20/30 rule.

2. Have a Budget Goal in Mind

Whether you want to pay off outstanding debt, increase your savings or plan a vacation, you always want to have a goal in mind when you create and follow a budget. Vague or not, this goal should stay in your mind as you execute your plan to reach it. It’s also a good idea to leave some wiggle room in case you have a hard time sticking to your new budget.

If you have children, start to save for college as soon as you can in order to lessen the stress of tuition bills. For those of you with pets, save for an emergency fund in case something happens. Even after you’ve reached your specific goal, it’s good practice to continue to budget and put away for future investments or retirement.


3. Sign up for a Budget App

Plenty of budget apps exist and are available for immediate download on your smartphone or tablet, many of which are free to use. Research the most popular budget apps, and decide which would suit your specific needs best.

Although many people still handwrite expenses in a notebook to track spending, this technique has become outdated and can be a waste of time. The great thing about most budget apps is that they automatically allocate your expenses to different categories and work with the budget you’ve created, which ultimately shows you where your money goes. There’s no room for excuses — take the first step and download a user-friendly budget app today.

4. Be Realistic With Your Budget

Don’t become so frugal you can’t enjoy life. It’s okay to go out to dinner every now and then and treat yourself to a new pair of shoes once in a while. Don’t tighten your budget so much you feel excluded from friends or activities. It’s important to stay involved in the community, maintain a social life and have fun — all of which are still possible on a budget.

Make compromises and decisions based on what’s most important:
  •          Limit eating out to once a week as opposed to multiple times per week.
  •          Cut back on groceries if you eliminate snack foods and things you don’t need.
  •          Continue to do fun things with your family, but try more at-home ideas, like cooking a meal together, family game night or Netflix movie night.

You cannot possibly eliminate all of these things to meet a goal faster and still remain content with your life, so remember you must be realistic when on a budget.  

5. Monitor Your Budget Often

Since your goals will change over time, it’s important to evaluate your budget often to make sure you have your goals in check and are on the right track toward them. A budget app makes this especially easy, but you still need to set a time, either weekly or monthly, where you can sit down and focus on where your finances are and where they’re headed. Use this time to also make adjustments and find places you can improve.
To do this, pay close attention to each category in your budget and see where most of your money is going. This will help you see the bigger picture and make better overall spending choices.


A budget doesn’t have to be a pain. If done correctly with realistic expectations, a budget can make life much easier by eliminating debt, saving for the future, and cutting back on things you don’t need. Oftentimes we don’t even realize where our money is actually going, so commit to a budget today and make 2018 the year you take control of your finances. 

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