Check out these simple and easy-to-follow budget rules to help you rock your budget and start winning with money!
There are rules for everything – gym rules (puh-lease wipe down the equipment after you use it), diet rules, school rules and now I am going to introduce you to the very needed budget rules.
To help you thrive financially, you need a budget. But many of us never learned to budget as kids or young adults. We don’t have any rules to follow to make it easier. Well that’s about to change. I created this list of budget rules to help you be successful with budgeting. Oh!, and scroll down a bit to grab my free Monthly Budget printable 🙂
Budget Rule 1. You need one
It’s that simple. You need a budget whether you are six figures in debt or you just made your first million. If you have money coming into and out of your life (which is pretty much everyone), you need a budget. Budgets require that you be proactive with your money. They are necessary because they allow you to feel in control of your spending and empowered with your finances.
Budget Rule 2. It needs to be written down
A budget is a contract with yourself (and spouse, if you’re married) about how you are going to spend your money. And just like a contract that you make with your rental agency, employer, or lawyer, it needs to be written down.
The written record of your contract (budget) is a physical reminder of how you are required to spend your money in order to meet your financial goals. If you don’t write down a budget, it will be forgotten and it certainly won’t be followed.
You can “write” your budget down in digital form using any of these budget spreadsheets, a cute and affordable budget book, or you can use my preferred method of pen and paper. You can sign up below to receive a free budget printable (and a spending log and bill checklist over the course of 3 days). It’s a great way to start your budget and be intentional about it every month.
Budget Rule 3. Consistency is key
Budgets are not a set-and-forget kind of thing. You need to budget on a consistent basis – it needs to become a habit. I budget on a monthly basis, but I used to budget bi-weekly since I would get paid bi-weekly. It’s up to you how you want to manage your budget, but I strongly suggest developing a schedule to ensure that you remain consistent.
Budget Rule 4. You need to check if you’ve stayed within your budget by tracking your expenses
Of course at the beginning of the month you need to allocate how much money you are going to spend on each budget category. That’s pretty basic. But it doesn’t stop there. That budget will be completely useless if you don’t track your spending during the month and then see if you are over or under how much you allocated in each category. It’s one thing to say that you will spend $500 on food each month…it’s another thing to actually do it. That’s why each budget that you create should have a section for how much you expect to budget and for how much you actually spent.
Budget Rule 5. You and your spouse need to be on the same page
If you and your spouse are on different pages with your finances, your budget will fail. You both have the ability to make or break your budget. Getting on the same page might not happen the first time you sit down to create a budget. That’s okay, keep trying. It’ll be worth it in the long run.
Budget Rule 6. It needs to be simple
If something is hard, complicated, or stressful, you’re probably going to avoid doing it as much as possible. You don’t want this to happen with your budget! You need to make it as simple as possible. Here are some ideas to make budgeting easy and simple:
- Put it in a format that you are most comfortable in. If you love Excel, make a budget spreadsheet. If you love pen and paper, just write it down the old fashioned way.
- Limit the number of categories. The more categories you have, the more of a headache it will be to organize your budget. You don’t need categories for work clothes, casual clothes, wedding guest clothes, workout clothes…you get the point. Just create one category called “clothes”.
- Set a date each month for when you are going to create your budget and for when you are going to review your budget. Same day every month is simple enough for me.
Budget Rule 7. You can adjust it…even in the middle of a month
Nobody is perfect. Your budget sure isn’t. You are allowed to adjust it at any time. Did you spend a little extra on food this month but didn’t make any clothing purchases? Then increase your food budget and lower your clothing budget. Your budget is not set in stone.
Budget Rule 8. It needs to be tailored to YOU
You can’t copy someone else’s budget. Just because your best friend living in middle-of-nowhere pays 20% of her income towards rent doesn’t mean that you should/can too.
There are some good guidelines that can get you started on what percentage of your income you should be spending on different categories (like the 50-30-20 budget rule or this list of suggested budget percentages). But you need to take these guidelines and apply it to your life and your financial goals. You need to create a budget tailored to you.
Budget Rule 9. There needs to be an underlying ‘why’
The mechanics of making and sticking to a budget aren’t glamorous. There’s nothing very motivating, exciting, or adventurous about it. That means it usually gets pushed to the bottom of the to-do list, pushed to the next day, or simply indefinitely postponed. That’s why you need to have a ‘why’ for your budget. Your budget needs to be more than just numbers.
Ask yourself “why is this budget important?”, “what financial goals will I be able to reach if I stick to my budget?”, and “how will my life (and my family’s) be better if I create and stick to this budget?”. Answers to these questions will give you a ‘why’ and will motivate you each day to stick to your budget.
Everybody can follow these budget rules
From a teenager to a recent college grad to a newly married couple to the retirees – everybody needs a budget and there are certain budget rules they need to abide by.
But as you read above, the rules are pretty simple and straightforward. The hardest part? Starting. That first day that you take out that pen and paper (or computer) and start to jot down a budget…well, that’s the hardest. Okay, being consistent is pretty hard too but you get the picture.
If you’ve made it this far down into the post, I know you are ready to start budgeting. Just do it. Good luck!
Do you break any of these budget rules? What other budget rules do you follow?