Budgeting the 30-day way!
Budgeting the 30-day way!
Studies show that less than 25% of Americans successfully stick to our budgets. Here's the catch, saving more than you spend is key to financial growth. And while some of the factors of growing wealth are beyond your control, such as a job market, medical debt, etc., a budget is beneficial for any level of income.
With that in mind, there are tons of ways to build and stick to a budget that's right for you. One of the most popular methods is the 30-day budgeting challenge.
Here's what you need to know to take control of your finances!
What is the 30-day budget challenge?
The 30-day budget challenges consumers to only spend money on essentials for 30-days. That means no ordering out, buying clothes, paying for concerts, etc., for an entire month. Like any budget, it requires planning, commitment and time to work. The 30-day budgeting challenge is especially beneficial for;
First-time budgeters: Longterm budgets are harder to stick to. If you're just getting into budgeting or looking for an easy one to start with, the 30-day budget is for you.
Budgeting on a crunch: Imagine learning about an event, activity, or place, you really want to go to in a months' time, but you're just a little bit short on funds. If you bunker down and budget the 30-day week, you may just save the money you want.
Debt-focused budgeting: If you're looking to pay down debt, the 30-day challenge might be what you're looking for. Put the entirety of your monthly savings towards paying down your debt and watch the total balance drop significantly compared to just making minimum payments.
How to do the 30-day budget challenge
The 30-day budget challenge consists of the following steps.
Review spending: The first step to any budget is to look at your spending habits. For the 30-day budget, it's easier to highlight your essentials such as rent, groceries (do not include take out or dining out.), loan and credit card payments, applicable medical coverage, and anything else you need to literally survive. Subtract your total from your monthly income. The sum is how much you will potentially save with the 30-day budget.
For example, if your income is $3,000 monthly and your bills are $2500, then you can save approx. $500 a month.
Also, don't forget to cancel your streaming services. $10-20 a month for any given subscription service adds up quick!
Track spending: It's easy to say you'll only spend money on necessities. It's harder to do it. Keep yourself honest by tracking your spending. And if you do slip-up, you'll know exactly how much more money you would've saved. Track your spending via any variety of digital means such as your MyOCCU app or by hand. The choice is yours.
Identify the biggest area of savings: Identifying your biggest unneeded expense is akin to tracking spending, although a bit more specific. As you go through your 30-day budget challenge, take note of the unnecessary objects you want to buy. For example, every time you feel the urge to break your budget, take note of what’s causing that feeling. Everyone has a hobby or want that a large chunk of their disposable income goes toward. Save yourself money by finding out which area you can cut back in.
Please note, we're not suggesting abandoning your hobbies altogether, indefinitely. We are suggesting you take stock of how much money you may be spending on them and to consider either cutting back or offsetting them by cutting back a specified amount in other areas. Let's say you're a photographer, and you know between equipment rentals, photo editing subscriptions, etc., that you spend about $200 a month on your hobby but that it's also as cheap as it can possibly be. Well in that scenario, consider cutting back in a different area so the $200 spent monthly hurts your finances a little less.
Figure out how you'll use the money you save: One of the best ways to stick to a budget is to have a set goal for the money, one that resonates with you. Maybe you really want to build a rainy day fund and work towards financial independence. Or maybe you just really want a new drum kit or the latest cellphone and that's fine too. Either way, having a savings goal in mind makes it that much easier to budget.
Free alternatives to spending
With rare exception, most hobbies can be accessed for free by making use of local resources. This includes libraries, event centers, community gatherings, and more. For example, if you're a huge movie buff who spends money on the latest new releases, then heading to your local library and renting your favorite movie or TV series is an easy way to beat the 30-day challenge.
If you're a social person who uses a night on the town to make friends, consider going to a free community event to satisfy your inner social butterfly.
With a little research and a few steps outside of your comfort zone, you'll find endless fun options to pass the time.
What to do if you didn't stick to your 30-day budget challenge
Start over. It's as simple as that. Budgeting isn't just a tool, it's a habit. It takes time to build a habit and the amount of time varies from person to person.
The takeaway
The 30-day budgeting challenge saves you money and gives you a measurable snapshot into what your finances could look like with a bit of discipline and time. Make it even easier by using an OCCU free checking account to help save you money.
