How To Create A Monthly Budget And Start Saving More Money Now

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Money is tight these days, and cash certainly doesn't grow on trees. If you feel like you don't have enough money to meet your basic needs, it's easy to feel helpless and alone. However, around 70% of Americans say that they're struggling financially, so you can rest assured that you're in good company. Much of the United States and global population struggles with personal finances in one way or another. 

One of the major reasons why the majority of people are in such a poor financial state is lack of education on money management and a limited understanding of budgeting. If you don't know your numbers and can't put a plug in your spending, you're setting yourself up for financial failure. Unfortunately basic financial education just isn't something they teach at a lot of schools or even colleges.

Learning how to create a monthly budget won't solve all of your financial stress, but it will certainly make it easier for you to feel secure and afford basic living expenses. And every little bit of extra financial security helps these days in a time of economic turbulence.

Read on to learn how you can set this frugal budget and ensure that it works for your specific financial needs. 

Use a Budgeting App 

For those who have trouble keeping track of a lot of papers, budgeting apps can work wonders. You can conveniently enter your information into budgeting mobile applications including your necessary expenses, income, changes to your finances, and more. Pretty much all of them connect with your bank and do the math for you by figuring how much you need to allocate where. 

PocketGuard is one of the best free apps that connects your credit, checking, and savings accounts. It detects your recurring bills and compares them to your income before showing you how much you have remaining for other expenses. From there, you can budget for groceries and household needs that exist outside your recurring bills. 

One of the greatest things about PocketGuard is that while it categorizes your expenses automatically, you can also create custom categories. This lets you include the things that are important to you within your monthly budget. 

Write Everything Down 

In addition to having a budgeting app, you'll want to write everything about your budget down on paper. You can place this above your desk at home or on the wall beside your calendar. When you see it, you'll remember how much you have to spend and where your money should be going to. 

Writing things down also has been proven to improve memory. It forces your brain to process things in a more detailed way. Writing the details of your budget will help you to keep it in mind throughout the remainder of the month, even when you're at the store with a dead cell phone battery and no physical list to look at. 

Consider The Essentials First 

Before setting a budget, you need to consider your recurring payments like rent, utilities, insurance payments, student loans, and routine medical bills. You can't stop these bills from coming and missing them will ding your credit score and accrue interest. 

The next thing to think about are essentials like groceries and household items (toilet paper, pet food, etc). Be realistic about what you can afford and make sure that you don't end up in a situation where you have no food at the end of the month. Cheap grocery stores like Aldi, Dollar Tree, Dollar General, Family Dollar, Costco, and Wal-Mart are a great way to save money when shopping for everyday items at retail shops. 

And keep in mind that you can still eat healthy on a budget if you follow The Frugal Diet, so there are no excuses to eat junk food in the name of saving money.

Include Entertainment Money 

When creating your budget, make sure that you don't forget to add at least a bit of spending money. You need some cash to go out with friends if you want to maintain your mental and social health. You also will want to treat yourself to a new book, video game, or just some takeout food every once in a while. While minimalism and frugality help budgeting significantly, you probably won't be living like a monk either. We're all human after all and can't penny pinch 24 hours a day, 7 days a week, 365 days a year.

If you don't have a specific amount of money set aside for things that you want, you're likely to become frustrated and pull from other necessary areas of the budget. In the end, you'll probably wind up spending more on entertainment than you would if you'd just put it into your budget in the first place. If you need to save even more money on your entertainment costs, consider using a top torrent to download media free of charge.

Don't Forget About Savings 

If you're struggling financially, you likely feel as though you're surviving rather than living. You likely are wondering how to buy a condo or travel around the world so that you can start living your best life. The answer to making this happen is simple: saving money. 

This is a challenge for most people, but you need to set aside at least a few dollars a week to go into savings. Even if it's just $10, you'll end up with $40 per month and $480 per year. This might not sound like much, and you should invest more if you can, but it's definitely better than nothing. A penny saved is a penny earned, and money saved by paying down debt or earned with compounding interest is more than just a penny!

Pay Cash Whenever Possible 

When you swipe a credit card for all of your expenses, it's easier to charge more than you have in your bank account. It doesn't feel like you're spending real money. You need to remind yourself that every dollar counts and that when you buy something, you're investing actual cash into it. 

Using cash also makes it a lot easier to track how you're spending money in your financial budget. You can place it into envelopes that are marked with what you need to spend it on at the beginning of every month. This can help you conceptualize how much you have to spend where. Physically finding, dividing up, and paying with money helps keep you more accountable than using credit cards and digital payments so prevalent and frictionless today.

If you see that you absolutely need more money for groceries or a similar necessity, you can place more money into the grocery envelope next month and see if that works. The bottom line for budgeting is that paying cash makes it easier to conceptualize your finances on a concrete and realistic level. This will help you maintain your fiscal fitness and frugal financial foundation. 

Credit cards do have their upsides if your finances are in order and you use them correctly. They can help to build your credit and earn cash or point rewards when used properly.

Beyond How to Create a Monthly Budget 

While budgeting is a challenge for nearly everyone, it's completely possible with a bit of planning and foresight. Now that you know how to create a monthly budget that works for you and your household, it's time to start looking into other aspects of your frugal financial affairs. 

Check out the 'frugal finances' tab on our home page for more tips like those you've read here today. If you need a bit of a money boost, we also discuss where you can take out personal loans under the 'loans' tab of our frugally financial blog. Good luck with creating the perfect plan for your individual frugal budgeting needs!

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