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How to Create a Budget Plan to Curb Overspending header image

How to Create a Budget Plan to Curb Overspending

Did you resolve to stick to your budget in 2020? If you’re having trouble following your budget each month, you’re not alone. It’s too easy to go overboard and bust your budget. A 2019 poll found 79% of Americans who have a budget have a difficult time spending within their budget. It happens when an unexpected expense comes up, a utility bill is higher than you had predicted, or you overspend at the grocery store. Sound familiar? Whatever the reason, it may mean it’s time to adjust your budget. Read on for tips for creating a budget plan that will help you get back on course.

5 Tips for Creating a Budget Plan

1. Track Your Spending

To create a successful budget plan, you need to know what your typical expenses are. No matter the amount, keep track of where each dollar goes. Once you start tracking where your money is going, you’ll learn what areas can be adjusted up or down. 

2. Use a Budgeting Tool

Whether it’s a budget app or a spreadsheet, find a budgeting tool that works for you and supports your budget plan. Consistently tracking your spending in an app or spreadsheet can help you better understand your habits. A morning coffee may not seem like a huge expense until you start adding up that daily $5 splurge.

3. Reevaluate Your Financial Goals

Your short- and long-term financial goals may change as you reach different milestones in your life. Are you still on track to reach your goals? If you’ve achieved a goal or your goals have changed, it’s probably time to make adjustments to your budget.

4. Prioritize Budget Categories

When creating and adjusting your budget, put the most important categories at the top — things like housing, food, transportation, savings, etc. After you’ve identified your top priorities, you can fill in the rest of the categories with your remaining funds.

5. Make Adjustments Frequently

Your budget will likely evolve as things in your life change — getting a raise, moving to a new house or getting a new job. As you regularly review your budget, it’s a good idea to make adjustments for changes in your income and expenses.

Achieving Financial Goals

Sticking to your budget isn’t always easy, but creating a budget plan and making adjustments along the way is a good start. Connect with a local Farm Bureau agent or advisor to discuss ways you can achieve your financial goals.

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