Image source: http://ak1.polyvoreimg.com/cgi/img-set/cid/57006855/id/D5_HxbfiRYO200duSm3oCg/size/y.jpg
Creating a budget sounds like you're designing a rigid structure that you have to stick to regardless of what else is going on in your life. While a budget is a great set of guidelines that will help you keep your finances in order, you want a more flexible budget that will allow you to enjoy financial freedom. These five tips will make that process easier.
Build In Spending Money
Often, the push to create a budget come from the need to pay off debt or save for a specific large expense. Even the tightest budget, however, needs some room for fun purchases. Make sure that your budget includes a little bit of money that's yours to spend as you like--at least until it runs out.
Leave Yourself Wiggle Room
Some expenses vary from one month to the next: your power bill, for example, or maybe your grocery budget. When you're writing out your budget, aim high. For example, if you typically spend $500 a month on groceries, but know that number goes up if you're having a party, leave yourself an extra $50 in the grocery budget on a regular basis. This will leave you the room to make your purchases without feeling like you're blowing your budget in the process.
Know What You'll Do With Extra Funds
When you do come up with an opportunity to save--say, you don't actually spend that extra $50 in your grocery budget this month, or gas prices dropped, so you didn't drive as much as you thought you would -- where does the extra money go? You have several options depending on your current financial situation and your financial priorities. For example, you might move the money to a specific budget item that is running a little short -- including your "play money" fund, if that's appropriate for your financial situation this month. You can also leave the surplus money in that budget item so that you'll have it to spend later: for example, if your power bill was low this month, but you know cold weather is coming and will cause it to rise, you might leave the extra money as part of your electricity budget so that you won't have to sweat over the increase next month.
Also Consider shifting the money to savings. Your emergency fund can always use the extra! Or you can use the money you saved for a specific purpose such as paying down debt or saving up for a specific splurge that you really want to be able to enjoy with your family.
Be Open to New Chances to Save
Don't assume that just because your budget has always worked, it's set in stone! There are plenty of other opportunities to save. You might try couponing to see if you can find better deals on your upcoming shopping trips, as well as learning to maximize your grocery budget by shopping sales and meal planning. You might also consider running a car insurance comparison to see if you can save money on your existing plan. In general, there are many areas in which you can try cutting down extra spending.
To create a truly flexible budget that allows you the freedom to do a little extra spending from time to time, always be on the lookout for savings. The more you can save, the more financial freedom you have!
Use an App
There are plenty of great budgeting apps that allow you the flexibility to move money around as necessary. Budgeting apps are an excellent way to keep track of how much money you have on hand at any given moment as well as how much money you have for each line item. This is especially useful for line items in your budget that may require you to make multiple small trips over the course of the month: grocery shopping or trips to the gas station, for example.
Taking the time to create a budget is well worth your while, especially if you're struggling with tracking your spending or hoping to experience true financial freedom. By creating a flexible budget, you can enjoy all the benefits of budgeting without having to adhere to such rigid financial management that it creates more stress. Sit down with your favorite app today--it'll be worth the effort!
