People aren’t just born budgeting wizards. You don’t vacate the womb with ninja-like spreadsheet skills. Becoming an expert budgeter takes practice, trial and error, and time. However, by adopting some of these budgeting hacks, you can significantly level up your money abilities now, saving yourself precious time and cash!
If you’re new to budgeting, just like any other acquired skill, it can be difficult to navigate early on. That’s why we’ve compiled a list of our most simple yet effective budgeting hacks that are sure to make a difference in your bottom line each and every month.
1. Automate your savings
If you’re just starting to get your money game together, introducing automation to some of your financial tasks can be an absolute game changer. It removes repetitive decision-making, freeing up precious mental energy. Plus it saves you the time it takes to sit down and move your money around manually.
You can automate a few different aspects of your finances by setting your bills on autopay, setting up direct deposit, or automating debt payments. However, paying yourself first is arguably one of the best budgeting hacks to automate your savings. It prioritizes retirement savings, which most people forget about.
When you pay yourself first, you’re eliminating the temptation to spend that newly earned money by removing it completely from your zone of spending, aka your checking account. Rearranging your priorities puts you and your savings goals first, which is powerful. Put those future savings on autopilot!
2. Start slow, and be realistic
To stay motivated when pursuing financial goals, it helps to get some small wins under your belt. Then as momentum builds, you’ll be in a better rhythm to tackle bigger and scarier goals. It isn’t realistic to go from saving nothing to suddenly slashing your discretionary spending by 90%. Habits take time to form, and that’s OK!
Small changes over longer periods of time make a huge and sustainable impact on your finances. (And really on anything else in your life for that matter!). Instead of trying to implement 1,000 new budgeting hacks into your routine overnight, make some small adjustments in a few categories to start.
For example, if you eat out 4 or 5 times a week, try and cut that down to just 3 times per week. Try it for a month and see how it feels. The following month you can pare it down again. Or, if you tend to overspend on groceries, challenge yourself to cut your grocery budget by 5-10% each month. Repeat until you hit your goal. Achieving these small wins can keep you motivated and help you stick to your budget for the long term.
3. Emergency funds & sinking funds
How often have you put together what you thought was a solid money plan for the month, only to be completely blindsided by an unexpected cost? Whether it’s a birthday you forgot about, car maintenance, or a surprise vet bill, unexpected expenses can wreak havoc on our budgets.
That’s where emergency funds and sinking funds come in to save the day! What’s the difference?
Sinking funds are small buckets of money you save over time to pay for predictable expenses. Or, to save up for upcoming splurges. For instance, if your favorite cousin is visiting town next month, squirreling away an extra $100 *before* they arrive gives you more to spend while they’re around.
Emergency funds are for covering disaster situations. It’s self-insurance to make sure if/when bad things happen it doesn’t wreck your other financial plans. Beginners should aim for a minimum ~$2,500 emergency fund.
4. Try using a 50/30/20 Budget
There isn’t one “correct” way to budget. There are plenty of sufficient budgeting methods, and there’s nothing wrong with DIY-ing a budgeting method that works for you. However, we almost always recommend starting with a 50/30/20 budget. It’s the most beginner-friendly!
Under the 50/30/20 budget, you’ll allocate 50% of your post-tax dollars to your needs, 30% to your wants, and 20% to your savings. This strategy helps prioritize saving for the future, no matter your income. And it also encourages spending on things that make you happy, while keeping living expenses under control. Even better, you can make managing it as simple or as complex as you’d like.
You can either opt to subtract your expenses from these 3 main categories or build subcategories into your budget to hone in on your specific spending habits.
5. Set up spreadsheet equations
Look, just because you’re interested in personal finance DOES NOT mean you have to like math. If you’re anything like me, you’re always looking for ways to do less math in your everyday life.
If you want to save some serious time budgeting, take a few minutes to learn to make your budgeting software do the math for you. Whether you are using Excel or Google Sheets, you can easily get your computer to do the number crunching for you.
Here are a few YouTube videos that show you how to set up a budgeting template!
6. Set up a monthly budget date night
The more you “check in” with your budget, the more likely you are to stick to it. We recommend setting the same evening each month to review your finances and refresh your budget for the coming month. We call it a “budget date night.” And you can make it something to look forward to each month, instead of dreading it.
Set aside a few bucks each month to use towards making your budget check-in night even more enjoyable. Grab a bottle of wine, get your favorite takeout, or rent a new movie you’ve been dying to see. You’ll be more likely to stay on top of your money because it’s no longer a dreaded chore.
7. Try a “no spend” challenge
If you’ve spent some time in the personal finance space, chances are you’ve heard of “no spend” money challenges. Typically, a no-spend challenge is when a person chooses to spend $0 for a specified period of time, typically a week or a month. Some folks, like our friend Liz Chai, have made this an ongoing way of life!
No spending challenges can be a great way to save up a decent chunk of change very quickly, but they can also be unsustainable over the long haul. They can cause a boomerang effect for some folks. Beware of that. It’s sort of like when you try to eat salad for every meal of the day, then end up bodying an entire pint of Ben & Jerry’s at midnight.
Instead, if you want an extra challenge, try rotating no-spend budget categories. For example, for one month, try not to spend any money on clothes. Then, next month, you can avoid takeout altogether. This can be a great way to make this challenge more sustainable, and less likely to result in crazy rebound spending!
8. Use cash envelopes
Desperate times call for desperate measures. If overspending is wrecking your budget every month, consider reverting to plain ‘ol cash budgeting. You can do this using the simple, yet effective, envelope method.
When you use cash envelopes, you physically put the amount of money you’ve budgeted for each category into labeled envelopes. Then, when you go to the store to buy groceries, or clothes, you bring the corresponding cash envelope with you, and you use the money inside to make your purchase.
This tactic immediately stops overspending, because once you run out of cash in a particular envelope, that’s it. You simply won’t be able to buy anything else. Limiting yourself in this way can also encourage you to spend less overall throughout the month.
9. Order your groceries online
One of the more modern budgeting hacks to help stick to your grocery budget is to order your groceries online for pickup! It’s not about getting them delivered – it’s about not stepping foot in the store, which often causes us to buy excess things we don’t need.
Grocery shopping online can help you to stick to your meal plan, avoid impulse spending, and save time on shopping. Plus, you’re able to avoid purchasing duplicate items because you can check to see what you already have at home.
While there are some downsides to online grocery shopping (like not being able to pick your own produce), if you struggle to stick to a grocery budget, shopping online can make it easier. Plus, by opting to pick up your groceries, you won’t need to pay a delivery fee or tip. But, even if there is a small fee, you’ll likely save more than that by avoiding impulse purchases.
10. Use an app to budget
If you’ve tried to budget using traditional methods only to end up throwing in the towel after a few months, maybe traditional budgeting just isn’t your style!
In that case, consider using an app or budgeting software to help you manage your money. This can make it even easier to manage your budget and can minimize the steps you need to take to oversee your budget.
Personally, we’re huge fans of YNAB, or You Need A Budget. YNAB not only helps you to create and manage your budget but also teaches you how to spend in a way that aligns with your values. While it does cost $99 per year, on average its users save $6,000 in their first year of using it.
We also used to love Mint for budgeting and tracking expenses. But as you may know, Intuit, Mint’s parent company, decided to shut it down. 😢 While we will never fully recover from this devastating loss, we’ve compiled and reviewed a list of the best Mint alternatives that can help you simplify the process of managing your budget!
11. Keep your goals in mind
Learning new budgeting hacks is great for saving money, but why are you doing it in the first place?
Setting SMART money goals can impact your financial success in a meaningful way. Understanding why you want to budget and save money can motivate you to follow through and actually “put rubber to the road.” Because honestly, what’s the point in growing your net worth if you don’t even know what you want to use that money for?
Instead of saving just to save, try spending some time reflecting on your values and thinking about the role that money plays in your life. What are some ways in which money has made your life better, easier, or more fulfilling? What are some things you’d like to achieve in the next 5, 10, 20 and even 30 years?
Once you’ve got a few goals in mind that make you want to jump out of bed in the morning, it’s time to put a game plan together by breaking down those goals into more manageable steps, and implement them into your budget. For example, if you want to save up a $50,000 down payment for a home in 5 years, break it down into a month by month savings goal. Each month, add an $833 home savings category to your budget.
Good budgeting helps you to save money and live more frugally, but effective budgeting helps you to live a happier and more fulfilled life.
The Bottom Line:
You don’t need a 40 page budget full of complicated math to successfully save for your biggest money goals. Nor do you need to overhaul your entire financial life and change directions overnight. Budgeting hacks are supposed to be quick, easy, and built upon over time. By automating processes, being more mindful with your spending, and slowly building frugal habits, you can build tremendous wealth in life.
By the way, you don’t need to implement every single one of these budgeting hacks to be successful. Just figure out which ones work best for your lifestyle, and build upon those. Everyone’s got their own money flow and rhythm – don’t overcomplicate yours!
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