10 great budgeting tips for more fun and less guilt

Budgeting is the first rung on the ladder to financial freedom. The purpose of a budget is to make your dollars work for you. It’s not all about sacrifice. The idea is to enable you to make choices that support the things you enjoy and the goals you want to accomplish.

To do that, you need to know how much money you have and where it goes. So flip the script on how people sometimes think about budgets. Your budget won’t suck all the fun out of life. It’s a tool, and you're in charge of how you use it.

With that in mind, let's get started.

Getting started with a budget that reflects your priorities

The most important thing about budgeting is to find a plan that works for you. These tips can make it easier and more fun to plan your spending. But first, you’ll need to complete a few quick tasks:

• Figure out your take-home pay. If your pay changes from month to month, base your plan on an average of recent months or on your lowest typical month.

• Track every purchase for a few weeks to a month, then sort your spending into categories. Receipts, bank and card statements, or an app can show you where your money goes before you plan.

• Add up your necessary expenses, like food, shelter, and transportation to work. Subtract them from your take-home pay. The result is your discretionary (fun) money.

• Plan for costs that don’t come every month, like car registration, annual insurance premiums, or holiday gifts. Estimate the yearly total, divide it by 12, and set that amount aside each month. For example, $600 a year divided by 12 is $50 a month.

• Make a list of ways you spend your discretionary money, and rank them from “yay” to “meh.” In months when money is tight, protect your budget by skipping the lower-ranked items. Upgrades to necessities, like fancy food, are discretionary, and the extra cost should come out of your fun money.

• Choose a budgeting method. Popular ones include the envelope, the 50/30/20, the weekly allowance plan, and zero-based budgeting. With zero-based budgeting, you forget about how you've been spending your money and start from scratch, figuring out what you really need and want to spend money on.

• Let technology do the work. The Achieve MoLO app is free and can help you make budgeting a breeze.

• Hit the ground running by selling off things you don’t use or need. Put at least half of the proceeds into a savings account or use it to pay down debt.

Finally, note why you’re creating this plan. Is your goal to pay down debt? Save money? Purchase a house? Retire early? Start a business? Expand your family? Bike around Europe? Buy a new car? Some combination of these? Whatever your dream is, congratulations! Once you start budgeting for it, you’re on your way.

Top 10 budgeting tips for beginners

Budgeting tips can help you stay the course when you just want to break out that credit card and go nuts because you’re stressed. Or celebrating. Or bored.

1. Put your big goal front and center

How will a spending plan improve your life? Visualize the result you want, and make a picture or vision board to match. Talk about it with friends and family. Get excited! Imagine how proud you’ll feel when you pull it off. Return to your vision every morning, and let it energize you.

2. Pay attention to little goals, too

Every big goal can be broken down into smaller ones. If you plan to save $10,000 in a year, break that into 12 months or 52 weeks. Decide what must happen every week for you to succeed. If you get paid every two weeks, you’d know that you need to put $385 into savings every payday.

Automatic payday transfers to savings help here, and are one of the easiest ways to make your savings consistent. Keep enough in checking to cover each transfer so you don’t get hit with an overdraft fee. A starter emergency fund for surprises like car repairs makes a great first little goal. Every little bit helps.

3. Celebrate your wins

Plan (and budget for) rewards when you hit big and small goals. If your objective is a trip to Paris in two years, for instance, take yourself for a bistro meal when you honor your monthly budget. Live it up (a little) while you save up. It’s difficult to make lasting changes if discipline feels like punishment.

4. Don’t let friendships bankrupt you

It’s hard to stick to a money-saving plan if you’re trying to keep up with a big-spending circle of friends. But there's a lot of power in the word “no,” and no shame in declining things that are beyond your budget. You can also propose affordable ways to socialize, like game nights, outdoor fun, potluck dinners, free concerts, open mic nights, food truck Fridays, and so on. True friends won’t drop you because you don’t keep up with the Kardashians.

5. Get a budget buddy

Chances are you’re not the only saver in your group. Cheer on like-minded friends, and help each other succeed. When you’re tempted to go rogue, check in with an understanding pal and let them talk you off the ledge.

6. Go cold turkey

Sometimes the best way to get big results is to make big changes. If money sneaks out of your wallet despite your best intentions, stop spending on anything beyond the necessities for a specific time. One study on habit development found it could take anywhere from 18 to 254 days of repetition for a habit to feel automatic. The good news is, the study found a single missed day didn’t make a real difference to the process overall.)

Be honest with yourself. Food is a need, but lobster isn't. Play around with ways you can avoid discretionary spending. It’s especially important to plan your free time, or boredom could undermine your resolve. At the end of your spending fast, decide which lifestyle changes you can keep, and which didn't work for you.

7. Combine goals

Do you have a costly habit that’s also bad for you? Too much alcohol, tobacco, or junk food? Reap a double reward by cutting down on your particular poison.

8. Watch what you watch

Reality TV has shaped our world in many ways by providing a distorted view of life. A 2005 study in the Journal of Consumer Research linked TV watching with stronger materialistic values. Shows full of splurges, lavish trips, and dream homes might make your own life feel small by comparison. As does social media if it seems like everyone you know is splashing out on things you’d also like to buy.

You don’t have to give up watching guilty pleasure shows if you don’t allow yourself to be influenced, but be mindful. If watching others enjoy the big life makes you feel bad about your own, dial it back. Take a break and do something you enjoy with people you love.

9. Procrastinate purchases

It’s amazing how many things we think we need (but don’t). Here are a few ways to avoid tricky spending traps:

• Disconnect your credit and debit cards from Amazon and other online shops you frequent. Entering your card number each time can give you enough of a pause to reconsider the transaction.

• Unsubscribe from promotional emails and send them to spam.

• Leave your credit cards at home, and delete mobile payment apps. In one study, people who paid with cash were much more likely to remember how much they spent than people who paid with a credit card.

• Instead of purchasing an item the minute you think you need it, add it to a list of things you plan to buy later. You’ll be surprised how many things drop off the list if you wait. When you have room in your budget, prioritize the things on the list and wait for opportunities to buy on sale.

Imagine how much faster you’ll hit your financial goals if you can cut your impulse spending down to size.

10. Trim expenses (then reward yourself!)

Want more money for fun without overspending? Look for opportunities to save, then reward yourself for finding them. For instance, shop your insurance policies, cancel unused subscriptions, buy a car that’s less expensive, get a home energy audit, start a carpool, or quit your gym and walk or run instead (your dog will thank you). Calculate how much you save, and put half into your fun money fund. That’s extra you can spend on whatever lights you up.

At the grocery store, try swapping out items for the lowest-cost option available. If you usually buy steak, make a stew in your crock pot instead. Exchange name brands for generic. Buy in bulk. This exercise doesn’t have to be a lifetime commitment, but it could illuminate where you can painlessly cut costs, and where you can’t.

Enlist the help of your entire family. Kids will really get into it if they get to keep some of what they save. If they’re willing to pack their own sandwiches or take the bus instead of making you drive them to school, reward them. You’re teaching valuable lessons.

When you do spend, spend wisely

Necessities do require some spending. But there’s a right way to spend.

• Be intentional. Always shop with a list.

• Plan for large expenses. Start comparison shopping at least a month before you buy.

• Pay attention to financing charges. If you can cut interest costs in half by refinancing or consolidating debt, do it—unless the fees would cancel out your gains.

• Brainstorm lower-cost choices. They might not all be great, but some will be.

• Look for deals on things you buy every day. Use apps like Gas Buddy, and virtual coupons from your grocery store.

What’s next?

Download a budgeting app. If you’re new to budgeting, the easiest way to get started is to use an app that relies on secure technology to sync up with your accounts, show you all of your transactions, and help you make sure all of the transactions are categorized correctly. The Achieve MoLO app is free. It’s designed to help you find money left over at the end of each month, which you can use to reach your goals.

Circle back. Budgeting isn't a set-and-forget exercise. Thank goodness. Your perspective and priorities will change over time. Review your budget monthly at first, then every few months once it feels steady, and any time your income or bills change. Think of it as a recipe that you tweak a little each time you make it, until the flavors are just right.

Supervise yourself. Accountability can help you be more successful. Look back and compare what you planned to spend to what you spent. If there’s a mismatch, maybe your plan wasn’t realistic. Or maybe more reminders and guardrails will help you stay on track

Be kind to yourself. No one’s perfect. You’ll make mistakes. And unexpected events like a car repair or medical emergency can temporarily blow you off course. Don’t punish yourself. Make adjustments if necessary and move on. You’ll get there.