People hear the term “old-fashioned” and assume that bigger and better things have come along over the years. But truthfully, sometimes the “old-fashioned” sensibilities can yield phenomenal results. Many professionals still swear by the tried-and-true methods, especially when it comes to finances. Here are six examples of budgeting tips that stand the test of time.
Be Flexible
Old-school budgeters know that while parameters are paramount, so is going with the flow. Be flexible with your budgeting, especially if you’re just starting. This doesn’t mean overspending and then justifying it with money you allocate for credit card payments. It means being kind to yourself about oversights, moving money when life forces your hand, and treating your budget like the living document it is.
Pay With Cash
Paying in cash is a budgeting superpower. We recommend paying for anything you’d categorize as “fun” or discretionary with cash, even physical paper cash if you can. Using a set amount of cash each month for these types of purchases teaches you self-restraint and to be more patient when buying something. You’ll probably second-guess your purchase if you realize you have to part with a twenty to have it.
Audit Your Budget (Often)
Flexibility involves revising your budget. And not just once throughout the year; we recommend going back to your budget often and double-checking its efficacy. This could be everything from the structure of your budget to what you’re using. For example, if you notice you aren’t tracking your spending as often as you should, maybe it’s time to rethink the software or app you’re using.
Budget to Zero
“Budget to zero” means that when you subtract your expenses from your income, the total will be zero. This is an old-fashioned way of budgeting to ensure that every last penny is accounted for. No dollar goes ignored, even if that means allocating it to fun money or, better yet, that emergency fund you’ve been meaning to get going. Planning out where each dollar goes leaves no room for error or confusion, leaving you with a clean, easy-to-understand budget.
Prioritize Lowering Debt
It’s important to pay credit card debt when you have it. It’s also true that paying interest on your credit cards feels like setting your money on fire. You want to feel this as little as possible, so focus on building a debt strategy that helps you lower your debt ASAP. If you aren’t struggling with debt at the moment, congratulations — keep it that way by paying off your credit cards on time.
Be Realistic
Budgeting is harder for those who can’t be honest with themselves about their finances. Sure, the point of having a healthy budget is to cut back on unnecessary expenses and identify blind spots in your spending. But it’s also to have a healthier relationship with money. So, whatever you do, don’t fall into the trap of holding your fun money hostage; be smart about your spending without being so militant that you give up on your financial goals.
