16 Ways to Budget Like a Pro

When you’re younger, you might not understand why budgeting is important. But as you grow older and fall into debt, which many of us do, you will understand why budgeting is more important than you could imagine.

Here are 16 ways to budget like a professional

1. Separate funds

One way to budget successfully is to separate spending money from bill money to understand your stability.
• Look at your imcome as opposed to your monthly bills. It’s obvious that your income should be more than your bills. If not then you have a different problem.
• In a workbook or notebook, separate these numbers and calculate how much you need for bills. This will give you the amount you can spend on other things.
• Remember to leave wiggle room for emergencies.

2. Have a savings account

Maybe you cannot put thousands of dollars in a savings account right away, but little by little, you can build a small savings.
• Create a separate account from your main checking account.
• You can either link it to your existing account or keep the savings account separate
• Decide whether you’re able to have a certain amount drafted from your paycheck or if you rather put in money as you can.
• Do not dip into this money just because you want to buy something. Save it!
• The only reason you should ever spend your savings is during an emergency.
• Keep your login and account information safe from others.

3. Essentials account

This might sound strange, but not all bills are essential. Yes, you have your bills needed to survive, but then you have your monthly ‘entertainment’ bills you think you need to survive.
• Create a spreadsheet of essentials
• Rent or mortgage are essentials and should be placed first on the list.
• Then utilities and everything needed to keep your home running smoothly
• Phone bills, life insurance, health insurance, and automobile insurance
• Then calculate food, hygienic products, and other miscellaneous essentials
• Garbage disposal
These essentials needs can be drafted from your main bank account or an essential bill account. However, too many accounts may make it difficult. So, drafting from the main account should be okay. Drafting is a way to make sure the essentials are paid without forgetting.

4. Non-essentials account

This account will include your non-essentials that provide fitness options, entertainment, or weekly expenditures for coffee and breakfast, for example.
• Create non-essential spreadsheet
• Include internet usage, which may fall into the essential category if you work online. So, consider this one in both categories
• Subscriptions to streaming services like Netflis, Hulu, and etc.
• Gym memberships
• Book clubs, workshops, and even paid domains for websites, as websites can be hosted for free.
• Any other club memberships outside the home and online.
These non-essentials, if times get tough, can be eliminated, aside from internet usage.

5. Have a spending account

This account should be the slimmest account you have. That’s because you should be paying those bills and essentials before you ever think of buying something you want. Yes, you deserve doing something special for yourself, but life happens first. After all bills are paid, you can buy something you want, or you can continue to build savings, transfer a smart amount to the spending account and use a portion to go on vacation.

6. Add 5-10% to your essential balance

This is a trick that I’ve used at the grocery store, and it works. Here’s how it goes.
• With each essential bill balance, add an extra 5-10%
• When it’s time to pay these bills, if they are drafted, move the 5-10% attached to each essential bill to the savings account or withdraw as cash.
• After each bill is paid and you collect the additional percentage, store it away as emergency or holiday money. This helps you keep ahead on those pesky Christmas gifts.
• You may have to cut out one or two non-essentials, however, to be able to do this. But it’s worth it.

7. Invest $10 a month in the stock market

Although investing can be risky, there are stocks which are pretty safe including Microsoft, Wal Mart, Apple, and etc. But, it’s always best to talk with a financial advisor to help you choose a good variety. Since budgeting means being frugal, only invest $10 per month at first. As you fall comfortably into your budget, you can invest a bit more over time.
Keeping a portfolio of investments is smart. It can help you out in hard times as well. And How is this budgeting? Well, a stock market account is an account as well and can grow money quickly with he right portfolio.

8. Connect accounts for easier transfer and payment

Although too many accounts can be confusing, you must keep your bills account separate from your spending account. To keep this simple, use these rules as follows:
• Have a savings account
• Have a bills account
• Have a spending account
• Credit card connected to spending account
• Online accounts like PayPal connected to billing or spending account
• Stock account connected to savings
• Savings account connect to billing account
This isn’t an exact structure that must be followed. It’s just a dang good one to keep things organized.

9. Sort your priorities

This is where some people get confused. Yes, it’s important to have life insurance, but not it’s not the first on the essentials list. First you must make sure you have the best and most affordable health and automobile insurance. Then you can set up your life insurance payments and fit them into your budget.
You should also prioritize your rent and mortgage, and utilities over phone and internet usage. However, there’s an extremely thin line between these, as you need your phone in emergencies and if you work online, you need the internet service. Sorting priorities will be something you have to analyze thoroughly, sometimes making difficult decisions.
10. Eliminate emotional spending
Emotional spending for non-essentials will get you into trouble fast. Before you buy that ‘needed thing’, ask yourself these questions.
• Why do I want this?
• How will it affect my budget?
• Am I buying this because I’m upset – basically, is this product a band aid of sorts?
• How does this purchase improve my life?
Just step back and count to about 20 and take deep breaths. Maybe you shouldn’t buy this thing until you think with your brain and not with your emotions.

11. A financial accountability partner

To help you budget like a pro, find a friend who has the same interest in their lives. This is called an accountability partner, and this is how you can help each other.
• Sit down and plan your individual budgets with a nice cup of tea or coffee. The budgeting process doesn’t have to be boring.
• Ask each other questions about essentials and non-essentials. Make sure that one of you is slightly better at budgeting than the other, so you don’t get sidetracked.
• Plan your budgets and keep in touch, often.
• When you’re tempted to buy something, you don’t need, call your accountability partner.
• The job both of you have is to talk each other down from the ledge, so to speak. You help each other understand the difference between something you need and something you want.
• You help each other save more money than you could do alone.
• Just beware of spending more non-essential money to hang out as friends.

12. Know your habits

Another way to budget like a superhero is to know exactly who you are. This can mean many things.
• Are you addicted to fast food?
• Do you like shoes, clothes, and all the latest trends?
• Do you like to hang out with friends, having drinks, going to clubs?
• Are you addicted to sporting events?
You know, this list could go on and on, but somewhere in there, when getting to know yourself, you’ll find the key to transforming your bad spending habits. When you find the culprits, you can work on greatly decreasing this money drainage.

13. Stay focused on a goal

If you remain focused on the important things you’re saving for, or the moves you need to make, you can budget and save much easier. The focus on your life shouldn’t be constantly spending money to bring happiness. Happiness comes from within. And when you reach that goal you saved so much for, you’ll realize what true happiness is – its fulfilment and pride in your accomplishments.

14. Use budgeting apps

While technology can be draining at times, use it to your advantage. Keep your bank accounts, insurance policies, and credit card accounts close by with apps on your phone. Check your essentials every day for any strange activity or false charges. Keep a close eye on your balance on and off the app. This means a paper and electronic budget platform. Compare these and make sure everything looks tidy and neat. Trust me, almost every budgeting tool and financial institution you need has an online app.

15. Adjust for any lowering or lost wages

If you’ve been out of work or made a change in your employment, this will ripple down into your budget. Always keep, yes, another account for emergency funds. I know I said you should complicate matters with too many counts, but you also never keep all your eggs in one basket. That’s even more confusing.
• Keep as much as you can in an emergency account
• If you see a change coming, immediately start adjusting your budget to bridge the gap.
• If you need to, do a few odd jobs to help keep your budget above water.
• If sickness occurs, ask a trusted family member to help you adjust your budget, or meet with your accountability partner.

16. Finally, never stop budgeting

Even if you’ve met your goals and money is piling in from all sorts of projects, jobs, winnings, and promotions, do not stop budgeting in the same way. Do not assume you can spend more because you’re making more. This mistake can land you in debt quickly, even with loads of money.
Be that professional.
Keep the budget tight and you will always budget like a pro. Use these tips and you will see a drastic difference in your life in a short period of time. On a personal note: This is how I bought a brand new car. All smiles here.