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9 Responses to “8 Tips For Effective Budgeting”

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  1. Sensible post!

    Another idea is to carry large bills instead of small bills. Research show that this reduces spending:

    http://news.yahoo.com/s/usnw/20090318/pl_usnw/new_research_finds_carrying_big_bills_curbs_spending

    Roger – A Content Life’s last blog post..Constructing a Content Marriage

  2. The automatic transfers works with one caveat. Make sure not to raid the fund. We are admittedly bad about that one…

    Greg’s last blog post..Tennis With A Friend

  3. @ Roger – Thanks for the additional point. It makes sense I guess breaking a $100 bill for a $20 purchase would be more painful, for me, than dishing out 4 $5 notes. But using cash, full stop, reduces my spending greatly as opposed to using credit.

    @ Greg – Welcome! Good point. We used to be guilty of this one too. It was more of an issue when we didn’t align our savings with our long term goals. It’s a lot easier not to touch a savings account for a holiday when you’re *really* looking forward to going. Thanks for your comment!

  4. Sherri, these are really great points. I especially think that #2 is super important. It can be easy to forget about quarterly or even yearly expenses. Some of those can really blindside you if you’re not prepared.

    I find that by listing out all those expenses and then dividing the sum by the number of paychecks we get per year, I know how much I need to deposit into a special savings account each pay period to cover these items when they come due.

    You’re also right on about finding a budgeting system that works for you. I have tried some fancy softwares but I’ve come back to the spreadsheet and a monthly pocket calendar and pencil. Maybe I’m a little old fashioned with the calendar and pencil but that’s easiest for me.

    Amanda @ Mommy’s Idea Book’s last blog post..Just Make Yourself at Home

  5. @ Amanda – Good tips for working out annual costs. We do the same and it works really well when combined with automated transfers. I don’t think you’re old fashioned with the pocket calendar and pencil you have a system that works for you and that’s great! Don’t fix it if it’s not broken :)

  6. I’m proud to say I now do all of these things, and it took a huge load off my mind.

    The most important thing for me was just to always be aware of (and accepting of) where I’m at financially. At one time I would avoid looking at my bank balance because I was scared of how low it would be. Terrible strategy!

    David Cain’s last blog post..There is No Good and Evil, Just Smart and Dumb (Part 1 of 2)

  7. That’s awesome David! Yes a terrible strategy to bury your head in the sand :) Better to know everything and exactly where you stand – the good, the bad and the ugly.

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