Last Updated on May 12, 2021
- Decide on your amount
- Contribute regularly
- Work toward the long term goal
In this article, we share the best things about budgeting to inspire you to put money aside without sacrificing the little things in life. Saving for your future comes in many forms, not just through saving in an IRA, like the Self-Directed IRA, or 401(k), such as the qualified Solo 401(k) plan.
What’s So Great About It?
The best thing about budgeting is that you know how much money you have. That’s it. That’s the big secret, but it’s a tremendous feeling, and a serious adrenaline rush of adulthood, to know how much money you have.
Besides knowing what you have, though, your budgeting skills let you know where your money is going. If you’re anything like me, you’ve read the articles that tell you, “stop buying coffee out,” and “dye your hair at home,” as ways of saving money. And while those can be good ideas, they’re not necessarily going to help you out. You need to be budgeting, and tracking, your money.
Exercise Your Budgeting “Muscle”
Budgeting gets a bad rap. “It’s boring”, and “pointless”, and it “doesn’t really help since you don’t have any money anyway”. But budgeting is a tool, and it can be super helpful once you get the hang of it. It’s like any muscle – your budgeting muscle gets stronger the more you exercise it.
And budget is not just planning out where you want your money to go. It’s also keeping an accurate record of where your money goes – so you can spot the differences and track where you give into temptation, and maybe where you shouldn’t.
For example, another hot topic right now is self-care. If self-care for you looks like a large cup of double-frap-caf-caramel-latte-mocha-chill, then make sure you’ve included it in your budget. The same way you pay your electric and water bills, student loans, and cell phone costs, throw the coffee amount into the budget so that it becomes a known expense. Then you won’t be taken by surprise.
A Few Tips
Everything you can include in your budget should go in as well. Wherever you track expenses, make certain you have all your regularly scheduled outgoing payments included, and set a reminder for any one-off items that come up. The holidays can be a budget buster, but they don’t need to be, if you set aside money in advance. If you track your budget in an app, set a note that you’re essentially putting aside X amount so you have it to spend in a few weeks. If you are budgeting on paper, leave yourself a note or even use a sticky note and move it week-to-week to keep a running total on.
Your budget likely won’t be exactly the same month-to-month, and that’s ok. You’re not more of an adult if it is. You don’t get bonus points. In fact, budgeting is vital because of how different spending can be from one month to the next. You also may not be able to save exactly the same amount every month. The important thing, though, is that you are saving something, that you start as early as you can, and that you are consistent.
It’s like the three principles of saving for retirement, which we preach on IRA Financial often:
- Start early
- Be consistent
- Trust the process
Remember, a budget works when you work at it!