Tips to Help You Budget Better

The Budgeting Series

*NOTE: This is part 7 of a series on budgeting.*

If you have missed the previous articles in this series, I encourage you to read them before moving forward – they are in linear order for the reader’s sake:

You can read any of them as stand-alone articles, but for the full effect, they are each designed to build off of each other.

Introduction

We have to start somewhere when it comes to our financial prowess

What a year 2023 has been so far, and with many of the posts being about budgeting, I hope you have been enriched by them. Hopefully, if you are reading this article, you have taken the time to look at the other ones; seems odd you’d want to know tips about budgeting better if you do not budget in the first place.

And, to add even more emphasis to the importance of budgeting, one only needs to look at the state of American finances to see they are in disarray. For example, Money.com indicates that the amount of non-mortgage debt Americans hold is $21,800. The average amount of credit card debt Americans carry is $7,951, and the Education Data Initiative reports that 45.3 million Americans have an average of $37,338 balance for federal student loan debt.

This isn’t surprising since 73% of American households do not budget at all!

Tips are always appreciated – Let’s get into some

To that end, let’s take a little time to unpack the financial benefits of being aware of your money-in/money-out scenario (which is what budgeting really is), in addition to the tips we believe here at The Wealthy Ironworker will help you budget better.

A little note before we begin – there are a couple of articles already that deal with some physical ways to help you budget better: Reevaluating Your Budget AND Tightening Your Financial Belt. This article, though, I wanted to take a look at some of the mental hurdles that – if overcome – will help you to budget better (or perhaps, if applicable, help you to begin budgeting in the first place). We can ALL get better at things, and the same is true for budgeting. If you read the following tips and apply them to your financial life, you will certainly be strengthened as a result. Let’s take a look at some of the more burdensome mental hurdles that, if identified and addressed, could help you budget better.

Tip #1: Don’t Overthink Things

People – including me – overthink far too much

I’m not really sure why many people do this, but for some reason, there are a lot who completely overthink a lot of things – budgeting included. In the most simplistic terms, it’s money in/money out. That’s it. Nothing extravagant, complicated, or difficult.

People seem to make it the boogeyman, though, and overthink it. I suspect, to a degree, many do not want to deal with the responsibility of actually controlling their spending. There are numerous stories where people, when they begin to budget, are very surprised to discover just how much money they were wasting because they were not tracking their expenses.

I’ve also spoken with some who find the act of evaluating their budget nauseating; it’s mentally taxing and takes intentionality many do not possess or desire.

Then there are others who are content with their money-in/money-out situation and do not want to make adjustments; life is busy, after all, and they do not want to open up the “complicated” budget. They are fine with spending every penny they get and live paycheck to paycheck. Yahoo reports that 57% of Americans can’t afford a $1000 emergency expense – and I’m willing to bet the majority of them do not budget, either.

There are other reasons, but the point is made: people overthink budgets – what they are, how often they should be tweaked, how deep they should delve into them, etc. Overthinking when it comes to budgets can have a debilitating effect, and we should be willing to dismiss it in pursuit of better budgeting.

Tip #2: Don’t Be Afraid of Failure

Failure allows us to grow, and that is true of financial health, too

Listen, I would like to say this right out front: people fear failure far too much. For what it’s worth, failure is a GREAT teacher; in fact, it’s often the best one.

“If you don’t fail, you’re not even trying.”

– Denzel Washington

If you fear failure, you probably are embodying the above quote. What’s more, this is just as applicable to finances as it is to other areas of life, too.

How so?

For starters, when you aren’t budgeting, you are actually failing twice: once because you aren’t doing it and another because you aren’t learning any lessons. THE point of failing IS to learn lessons and adjust as a result. To that end, you need to start budgeting – and make adjustments as needed – because you WILL have to make them periodically. But fearing failure (or worse, conflating it with the unknown) is not reasonable.

Next, people unreasonably view tweaks in their budget (a necessary thing for many reasons) as a form of failure – as if to say they needed to get things perfect the first time around. This is completely unnecessary because we don’t get things right, and we are always having to make adjustments based on various circumstances. Coupled with people’s fear of failure, you have a recipe that, at least to me, is a disaster.

The idea someone will get things right the first time AND they will not have to change/tweak things is fairly ridiculous. We would do well to remember that when establishing, maintaining, and adjusting our budgets, changes – both small and large – can and will be necessary at some point.

Tip #3: Adjust Accordingly

Adjustments to your budget are like these knobs – little tweaks can have significant impact

Speaking of adjustments, in Tightening Your Financial Belt, I outlined how there are times when you need to either cut spending, increase saving, or decide what to do with some extra dough when a bill is paid off. In short, there are times when we have less/more money to work with, and that should prompt us to make necessary changes.

This could be cutting your entertainment funds down, a reduction in eating out, or even eliminating your cell phone bill if times were tight. What happens when you don’t budget, though, is you are unaware of any adjustments you need. And, even if you do budget, people are hesitant to make the needed adjustments – often because they involve some form of entertainment. Those expenses are the easiest to cut – but they are also the hardest. They aren’t absolutely necessary but hard to part with; after all, why can’t we live our lives with some entertainment? What’s the point?

The idea here is to be mentally resilient, and willing to make adjustments wherever necessary. You want to avoid debt at all costs.

Tip #4: Understand What You REALLY Need to Live

What do you REALLY need to live a good life?

Lastly, I’d like to give you a little preview of our last article in this series: What Do You REALLY Need to Live? Without tipping my hat too much, if you understand exactly what it is that you need to really live, you will be better off than the person who doesn’t. You won’t care about keeping up with the Joneses, what others think, or even allow their perspective to skew yours. You will have built a mental resiliency that allows you to build, adjust, and maintain a robust financial picture, setting you apart from millions of your peers.

Conclusion

In the end, if you are looking to have great financial health, you will need a combination of mental tenacity coupled with an understanding of what’s vital, so you can make the necessary adjustments. People have an unhealthy fear of budgeting, and their lives are negatively impacted as a result, Better that you can – and do – make any and all adjustments necessary to ensure your financial health stays in the black. What’s more, the choices you intentionally make do have generational impact – for good and bad.

Build up your budgeting knowledge, strengthen your resolve, increase your mental resiliency, and make it a priority in your life. Use the tips provided to help you in the pursuit of stronger financial health. I assure you it’s worth it.

If you have missed the previous articles in this series, you can find them below in the order they are meant to be read:

Budgeting 101
Living Below Your Means
Avoiding Lifestyle Inflation
Reevaluating Your Budget
Tightening Your Financial Belt
Introducing Finances to Your Children
Tips to Help You Budget Better
Reverse Budgeting and Building a Case for Opportunity
What Do You REALLY Need To Live?

*NOTE: This is part 7 of a series on budgeting.*

Tips to Help You Budget Better

The Budgeting Series

Introduction