How to be better at budgeting


Developing and using a budget can be an important financial step for anyone to take no matter where they are in their financial life. Budgets don’t have to be complex using spreadsheets and formulas, sometimes simple is really better.
Why do most people fail at budgeting?
Most of the time it can be traced to a combination of developing an unrealistic budget based on what they hope to do and having too complex of a budget that they could never use. It is better to start with a simple budget based on what you can actually accomplish.
What is the initial step to setup a budget?
First, identify what your goal is for budgeting, is it to save more, payoff debt, have a tool to make financial decisions or some other reason? The reason for budgeting will help you decide why type of budget would work best for your situation. 
Is there an important step that many people skip that causes budgeting problems?
The most missed step is taking a look back at the last 3 – 6 months to see where they have actually been spending. This review is helpful in setting up accurate budget amounts that you can actually achieve. This is the only way to make a realistic budget.
Why is a complex budget a problem and how can a budget be made simple?
For many of us, we don’t really need to setup a budget and track every expense. For most, only budgeting for discretionary spending is all that is necessary to achieve their goals. We don’t need to track every penny spent.
What is another important way to make budgets work for the long term?
No matter how much we plan, there will be unexpected expenses that we don’t have in the budget. The key is that if you make an unplanned expense that you reduce spending in another area for that month so that you have a balanced budget at the end of the month. Success is measured by not exceeding your overall budget, not how well you do in specific categories.
What is the best way to start budgeting?
Start small, maybe only focus on setting a budget for entertainment, eating out and groceries. Also, make the budget weekly instead of monthly so that you can monitor and track easier. This becomes more of a spending budget than a true household budget. Starting small helps you build the discipline to move to a larger and more encompassing budget later.

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