Budgeting Goals To Get You in Control of Your Finances

If you have never had a budget before, then your goal should be setting up and following a budget for this year. This is not a complicated goal, but it does take discipline and some work. It is important to realize that it takes a few months to settle into a working budget for you. Also, your budget can change from month to month to meet your needs and current expenses. The two main goals are to spend less than you earn and to know where your money is going. Once you have a working budget you can work towards your other goals of saving money and getting out of debt. It is important to avoid these common budgeting mistakes when setting up your budget.

When you are setting up your budget, it is easier to start by setting your budgeting amounts based on the average of your last three months of spending. Many budgeting programs can import past transactions and help you come up with the estimates that you need for your budget. Then you can begin to make adjustments after you have those initial amounts. 

This simple budgeting goal is essential to making your budget work for you. If you do not know where you are spending your money, it is difficult to change your habits. If you are a budgeting pro, you may want to revisit this goal to see if there are any areas you can improve on now. You can do this on a broad basis looking at general categories or take the opportunity to break it down into smaller categories within your broad categories. For example looking at your grocery budget how much do you spend on convenience foods or alcohol or eating out? Can you change that amount for the better?

If you need help tracking your expenses and your spending, you have two basic options. You can go with an envelope budgeting system where you primarily use cash for most of your spending. The other option is to use software that will help you track what you have spent each day. 

This goal fits into tracking your expenses, but it can also help to prevent common banking errors and overdraft mistakes. You may break this into smaller goals such as keeping track of your account balance every night, as well as balancing to your statement each month. This can be a simple process if you have budgeting/money software.

If you do not balance your checkbook or your balance to your bank each month, you may not catch any errors that the bank makes with your account. It allows you to catch if there are fraudulent charges. This does not take too much time if you do it every day or every week.

If you have had a working budget for a while, you may want to take the challenge of cutting your spending in specific categories each month. Look at your budget to determine which categories you can save more money in. Most people can find ways to trim their grocery, entertainment and transportation categories without too much effort. Challenge yourself to trim spending in at least three categories. You should also set up a category to cover irregular spending like the cost of attending a friend's wedding.

When you are trying to save money, you should be creative. However, it is important to not trim spending too much because this can backfire and you may end up blowing your budget out of frustration. With tweaking and planning, you can likely trim in several categories without feeling like you are cutting too much. 

This goal involves putting more money into your savings account than you did last year. This is a goal that you should work on after you have gotten out of debt because it does not make sense to save money when you are paying a higher amount of interest than you are earning. This goal can be accomplished in a number of ways, and you may want to set specific goals regarding your retirement, your emergency fund, and any other savings categories. Saving more is just one of the ways you can take control of your finances.