4 Common Obstacles to Making a Useful Budget — and How You Can Beat Them

Like New Year’s resolutions and fad diets, budgets seem destined for failure.

How are you supposed to allocate every dollar of every paycheck without hiccups or unexpected expenses? Can you stick to a budget and still have fun?

There’s one thing that so many budget experts skip mentioning: There’s not a single perfect budget template to rule them all. Every person’s financial situation is different, so there can be many correct budgets.

Now that you’ve had that pep talk, you need to find the budget that works for you. It’s not just about choosing between apps and paper and pencil. It’s about cultivating a habit that supports your financial goals.

But it’s hard to get to the healthy-habit philosophy if you’re stuck trying to figure out what’s coming in and out of your bank account each month or how to plan for your wacky billing schedules.

We’ve got answers for that. Read on for some basics and advice for tackling four major budgeting obstacles you’ve probably already encountered.

How to Find the Right Budgeting Method for You

Your biggest budgeting problem may not have anything to do with your income, spending habits or savings goals; rather, it’s that you haven’t found the right budgeting method for you.

With so many online templates, apps and blogger-designed financial planning tools, the search for the perfect budgeting method for your needs can take longer than you hoped. Here’s how to brace yourself for the inevitable trial-and-error process.

Start With Info You Already Have

Start your budget with what you already have: bank statements

Whether you’re downloading the app your friend recommended or trying to pick the perfect notebook to track your budget by hand, you can take a few steps to increase your chances of budgeting success.

“Before you actually sit down to make a budget, print out the last two or three months of statements from your credit and debit cards,” Bridget Todd, COO of The Financial Gym, says. “Go through and categorize everything.”

You can export your statements to a spreadsheet or use highlighters on printed statements. Doing this helps you see patterns in your spending in the categories that fit your life — not just the categories your old copy of “Budgeting for Dummies” suggests.

“So many people track spending but don’t use that information,” Todd says. “What are you spending money on now? Where is there room for improvement?”

Let It Percolate and Adjust as Needed

Lillian Karabaic, CEO of Oh My Dollar!, likes to remind her clients that the first month you set up your budget, you’ll forget about things.

“That’s OK. You’re just getting better information” each month as you remember expenses, she says. “The third month is the point at which, if you’re still doing it, you start to feel like you’re in charge of the budget.”

Key words there: If you’re still doing it.

You’re likely to fall off your budget in one of these two ways: You set restrictions for yourself but fail to meet them, or you forget to keep up with your budgeting method and give up.

“Budgets can be flexible,” Tonya Rapley, founder of My Fab Finance, says. “Give yourself space to adjust as needed. Pick it up and use it whenever you remember.”

You only really need the parts of a budget method that serve you and your plans for the future. Todd doesn’t like to think of a budget as a money diet, but rather as a place for goal setting.

If she’s working with you on your budget, she says, “You’re going to save every month, then pay your fixed expenses, and then I don’t care what you spend your money on — as long as you meet your savings goals.”

Feeling motivated to set up your first budget or revive your abandoned one? Get ready to face these money issues that can trip up even the most confident budgeters.

How to Overcome 4 Common Budgeting Obstacles

These four budgeting obstacles can trip up even the most determined budgeter.

1. Weird Pay Schedules

Weird Payday Schedules can conflict with your budget

Monthly, twice monthly, biweekly — all you really want to know is when you get your money and how long it’s going to last.

Getting paid biweekly can throw off your budget when you come across a three-paycheck month. “That magical third paycheck usually means that something is going to be wonky elsewhere,” Rapley says. “It means you might not get paid until the middle of the month the following month.”

Todd suggests pretending you get only 24 paychecks so the occasional bonus paycheck doesn’t throw you off. She advises her clients to “identify the month the third paycheck hits and try to save that entire paycheck or devote it to paying down debt.”

If you have extra money in your checking account, that wonky third paycheck may not faze you at all. Karabaic suggests building up a buffer of about one month of expenses and leaving it in your checking account.

While it can take a while to build up that buffer — she says the average time is seven months — it’ll help you avoid overdraft fees and weird pay-schedule surprises.

2. Irregular Income

If you don’t rely on steady paychecks, it’s hard to determine how much money you’ll actually have on hand in a given month.

If you’re a server, bartender or other professional who relies on tips for much of your pay, we like bar manager Jeff Morrison’s system of figuring out your income.

Morrison recommends tracking your income after tipping out other staff. Total your income for 10 weeks, then divide by 10 to get your average weekly income.

It’s not a perfect science, but it can help you figure out what to put on the “income” line in your budget. Tip-based workers can find more info on how to budget in this post.

If you’re a freelancer or one of the 33% of Americans involved in the gig economy, Todd recommends backing into the amount you need to live on by evaluating your monthly fixed expenses. Include line items like rent, utilities and debt payments, but don’t forget to work in a savings amount — Todd says it should be at least 10% of your gross income.

Self-employed budgeters can benefit by taking a step back each quarter to examine their income. “If you’re paying quarterly taxes anyway, you have this natural stopping point to look,” says Karabaic, who tries to increase her income by 10% each quarter. “It’s a good way to check on the health of your business.”

3. Irregular Expenses

Irregular Expenses can conflict with your budget

What about expenses that don’t come on a regular monthly basis? We’re talking your twice-yearly car insurance. Your subscription to a pricy trade publication or professional association. That dental crown you know you should get replaced sooner rather than later.

First, tally up those annual or twice-yearly expenses. It can help to keep these in a separate list or spreadsheet than your actual budget, as the list may change as you keep or drop subscriptions, or remember additional expenses.

Then it’s a matter of adding up those expenses and dividing by 12 to find out how much they cost each month. “You might open a separate bank account for your annual expenses,” Todd suggests. “Then when the bills come, you don’t have to adjust your spending. It’s similar to saving for Christmas shopping” throughout the year, she says.

It can also help to earmark cash for expenses you know will crop up eventually. Karabaic calls hers “a wish farm: categories for things I want or feel like I should be saving for.” They’re not necessities or the highest priorities, but she says it takes the panic out of making those purchases.

“Cellphone replacements are a huge one. Glasses,” she says, adding the laptop she drowned with coffee to her personal list. If money’s tight this month, maybe you don’t contribute to the wish farm, Karabaic says. “But if you’re feeling flush, you can take care of future you.”

Once you start saving for irregular expenses, Rapley advises to plan ahead to anticipate them. “Set calendar reminders for two months before it’s due, then one month until it’s due, two weeks until due. Don’t let these expenses take you by surprise. A reminder on the day it’s due isn’t enough.”

4. So Many Due Dates

This one’s easy: If you have a hard time remembering which bill is due when — or those dates just don’t jibe with your cash-flow situation — you can ask to have them adjusted.

“If you’re a responsible credit user, [credit card companies are] very flexible, and you have some control,” Todd says. “It might mean you pay two bills in one month, a regular one and a small one,” while your billing cycle adjusts.

Utility companies are similarly flexible, and you can ask your internet and cellular providers, too.

“Don’t change your due date to the first” for anything, Rapley says. “You usually have a mortgage or rent due then, so space it out.” But she says that if you have the money for a bill ready before your due date, go ahead and pay it. “You don’t always have to wait until the payment date.”

Lisa Rowan is a senior writer and producer at The Penny Hoarder.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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Your Money, Your Life: Episode 4 – ‘Creating A Budget That Works For You’

Learn why having a spending plan—also known as a budget—is key to financial wellness and enables you to confidently set and achieve your goals, with guest Angela Yee, host of The Breakfast Club and host and creator of the ‘Lip Service’ podcast.



The new personal finance podcast, Your Money, Your Life is sponsored by Prudential and hosted by Black Enterprise’s own Alfred Edmond Jr. This special series features a lineup of great guests including The Breakfast Club’s Angela Yee; DeForest B. Soaries Jr., founder of the dfree Financial Freedom Movement; Tiffany “The Budgetnista” Aliche; and Jacquette M. Timmons, president & CEO of Sterling Investment Management. The show will cover money topics ranging from how to control your debt to our psychological relationship with our finance. A can’t miss!

The post Your Money, Your Life: Episode 4 – ‘Creating A Budget That Works For You’ appeared first on Black Enterprise.

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12 DIY Christmas Gifts That’ll Make Your Loved Ones (and Your Budget) Happy

I grew up with a big family, which made it hard to buy everyone something nice at Christmas.

My gift options were to shop at the dollar store or “do it yourself.”

While the dollar store is by far the easier path, DIY gifts are a genuine labor of love. But you don’t have to be Martha Stewart or a contestant on “Making It” to explore the DIY route. It’s more about the gesture than making a perfectly crafted artisanal present. Your loved ones will likely appreciate a heartfelt and useful gift more than a store-bought one.

Plus, staying at home to make these gifts will save you from the impulse purchases shopping can bring.

12 DIY Christmas Gift Ideas to Try This Holiday Season

1. Photo Magnets

An assortment of wood cut outs lay next to modge moge.

These are so much fun to make, and there are dozens of ways to get the job done.  

Use precut wood shapes, tiles, glass stones or mason jar lids — all found at your local arts and crafts store — as your base. Use some Mod Podge (a glue-type sealant) to adhere your printed photos to the base. Once dry, glue magnet strips to the back of the base. Done.

Or, you can use adhesive magnetic sheets for bigger images. You can make hundreds of these personal DIY gifts and inexpensively give your friends and family all the feels.

2. Baked Goods

Chocolate chip cookies sit on a plate.

The fastest way to someone’s heart is through their stomach. Home-baked treats will do the trick.

Try making holiday-themed cookies with cookie cutters and decorations, or play with seasonal flavors like peppermint, ginger and chocolate.

Turn up the sweetness with some fudge, challenge yourself to whip up toffee or make a loaf of banana bread (my mother’s signature baked good).

Bake your goods in large batches and deliver them to family, friends and coworkers in reusable holiday tins, treat bags or Tupperware.

3. Family Cookbook

Covertly gather recipes from your family members and put them into a special family cookbook.

Ask family members to share their recipes or take notes next time someone whips up a casserole or batch of cookies. Maybe grandma has a box of handwritten recipes you can convert.

Create an accessible digital version online or assemble your own hard copy. Free and low-cost templates and software are available if you want to do it yourself.

The cookbook will be a treasured gift for generations to come. Just don’t tell anyone else what’s in the sauce, because we all know that’s a family secret.

4. Pickled Fruits and Veggies

Pickled vegetables make great Christmas presents.

Use a hot water bath to pickle fruits and vegetables. You can pickle anything from cucumbers, green beans and carrots to cauliflower and pears. Find out your relatives’ favorites and surprise them with a homemade jar — or five.

One minimal investment in canning equipment and the basic ingredients can yield enough to give something to everyone special in your life during the holidays. Go a step further and create your own cheeky product labels for the jars.

You might find a workshop in your city to teach you how. Follow our pickle tutorial or use herbs and vegetables from your garden to save on produce costs.

5. Framed Pictures

Love that photo of you and mom on vacation? What about the one of all your best friends together? Frame it.

Scope out affordable picture frames at thrift stores, dollar stores, Michael’s (it always has a coupon available) or another major retailer.  Or spruce up and decorate an old picture frame with buttons.

Once you know what size frame you have, get the highest-resolution copy of the picture and have it printed to size at a local photo processor (CVS, Walgreens, Walmart). Each print usually costs less than $ 1. Too many photos to narrow down? Assemble an entire photo album.

6. Ornaments

Commemorate the year with a homemade ornament using paper, glass, precut shapes or reusable everyday products like wine corks, popsicle sticks and bottle caps. Spend a Saturday and craft them all yourself, or get the kids or significant other involved.

Make cheeky ones using pictures of the kids or fur babies, or you can tailor them specifically to your home state or siblings. Start a tradition and create a new one every year.

7. Mason Jar Mixtures

A mason jar mixture is wrapped in ribbons.

Assemble an edible gift in a jar. Concoct your own specialty holiday recipe like salsa, dry soup mix, hot chocolate, snack mix, nuts and cookie ingredients. Shoot, you can even go the alcohol route and infuse vodka.

All you need is a case of Mason jars, your ingredients and a recipe tag. The tag should include ingredients and any baking instructions.

If it’s really good, you’ll have everyone excited for next year’s batch.

8. Kid Art

A child's art work hangs on the work desk of a person.

There’s nothing wrong with this kind of child labor. The rugrats get creative and you get cheap DIY Christmas gifts out of it. Win-win.

Gather non-toxic paints, glitter and large pieces of posterboard (paper, cardboard or canvas work, too) for the kiddos to craft their masterpiece upon. Let them go to town. Once it’s finished and dry, cut up the project into frameable pieces. Sign and date the bottom like a true artist.

Frame the pieces and give them out as gifts. I have the one my nieces made me in 2011 on my desk.

9. Coasters

Do your civic duty and save all tables from condensation rings by making DIY coasters for your friends and family. It’s a cheap and easy gift you can’t go wrong with, because everyone needs coasters, especially funky (or classy) homemade ones.  

Craft DIY coasters out of ceramic tiles, wood slices and pressed flowers, mason jar lids, popsicle sticks or fabric. The picture magnets mentioned above can double as coasters if you skip the magnetic strips.

Sets of four are standard, so put on some Netflix and settle into a project weekend.

10. Pressed Flowers

Pick wildflowers on a walk, or save flowers from a special occasion and use them to create a piece of art.

Press the flowers with a book or iron and display them between glass, on paper, as a bookmark or matted onto a candle holder or key ring. There are a surprising amount of pressed flower projects to try.

While the art of flower pressing takes time, the elegantly preserved souvenir will be worth it.

11. Homemade Spices

Homemade spices can make a great, affordable Christmas present.

Homemade spices, seasonings and extracts are an affordable and practical gift for the food lovers in your life.

Awaken your inner chef and concoct a spice combination that suits your personality or complements a slice of your favorite meat. Blend a piquant taco seasoning, dry rub or apple and pumpkin pie spice mixes.

Just don’t forget to add your own labels for that extra zing.

12. Knitted or Crocheted Goods

Homemade scarves, hats and gloves make for affordable Christmas presents.

My favorite handmade gifts over the years have been knit scarves and shawls my mother made.

Knitted and crocheted goods are truly one-of-a-kind gifts.  Something as simple as a hat, scarf or bag will carry sentiment forever. The only thing they really cost is time, which makes a finished product feel more valuable.

If you don’t want to make bulky sweaters and ill-fitted hats for people, try coasters, blankets or rugs. There are free patterns galore online.

Probably not a new hobby to take up 10 days before Christmas, though.

Stephanie Bolling is a staff writer at The Penny Hoarder. She’s making mustard and pickled things as gifts for her friends and family this year. Read her full bio here or say hi on Twitter @StephBolling.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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The 60-20-20 Budget Puts Needs Before Wants. Here’s How to Try It

I always thought the right budget breakdown was the tried-and-true 50-30-20 method, where 50% of my monthly take-home pay goes toward living expenses, 20% toward savings and 30% toward whatever I want.

But when I finally got a financial advisor, I was surprised to hear that his recommendation wasn’t 50-30-20 after all — it was the 60-20-20 budget.

During our first meeting, we discussed all of my finances. I explained to him that I own a home in a costly state (hello, New Jersey), commute to work in New York City, aim to save a large amount every month and have little debt.

With all of this and more in mind, his recommendation of the 60-20-20 budget made perfect sense. I immediately became a huge fan of how the money I save and spend on whatever I want is equal — each 20%. Plus, knowing I was allowed 60% of my monthly budget for my living expenses, I had a little more flexibility over my fluctuating bills like groceries and electric.

Why the 60-20-20 Budget?

In reality, you can budget your take-home pay any way you want, but the 60-20-20 budget is great place to begin.

Let’s say your monthly take-home pay is $ 4,000. According to the 60-20-20 budget, you should allot 60% (or $ 2,400) to your monthly living expenses, 20% (or $ 800) to savings and then 20% (another $ 800) to your personal wants.

My financial advisor, Northwestern Mutual insurance agent Nicholas Verard Zanoni, said this method can help you build structure into your budget and learn how to save.

“With this rule, 60% of your [take-home pay] will typically go toward your lifestyle expenses,” Zanoni said. “These are your needs — food, water, shelter and standard of living. Things like your fixed expenses. Then 20% is for your discretionary spending. This is your fun money — traveling, drinks, sporting events, concerts, eating out, etc. And the last 20% is to be saved or invested.”

It’s not much different than the 50-30-20 budget, but it puts more of a focus on fixed expenses and savings than personal wants and spending.

“This is a rule-of-thumb guideline to start out with and visualize,” Zanoni said. “Whether it’s 50/30 or 60/20, it’s really just splitting hairs in a lot of ways. Ultimately, my goal is to help coach my clients at first to spend 80% and save 20%.”

When you take a step back and look at how much of your take-home pay goes into each of these three buckets, you can better analyze your spending in order to make smarter savings decisions.

How to Get Started With the 60-20-20 Budget

If you’re ready to utilize the 60-20-20 budget, start by taking inventory of your finances. Write down every monthly expense you can think of and keep track of them in a spreadsheet. Then look at how much you’re spending through the lens of the 60-20-20 budget.

From there, consider using a financial app to help you find ways to cut back and save even more.

“People should focus on treating their savings like a bill, an obligation and not so much of an option,” Zanoni said. “Focusing on fixed expenses and saving helps identify the money that might be being spent unnecessarily or without much recognition. More often than not, most individuals are not aware of all of the things they spend money on.”

This budget could help you be more aware of your spending habits, especially when you’re doling out the dough for things you don’t really need (hi, super cute sweater from H&M) or that you’re not using (hello, monthly streaming subscriptions).

Instead of equally spending $ 800 on savings and $ 800 on your personal wants, perhaps you’d want to put $ 1,000 toward your savings and only spend $ 600 on your personal wants. That would shift the 60-20-20 budget to 60-25-15, and you’d be saving more.

“In order to reach the goals we have for ourselves, we very typically find that we need to increase savings to 25 or 30% over time to reach those goals,” Zanoni said. “People may not be able to start out at 20%, but that’s what we want to help them achieve and work toward at first. Over time, we will need to be saving more as we continue to progress in life every single year.”

Lastly, Zanoni said to keep your goals in mind and consider working with a financial advisor who can help you stay on track.

“Focusing on that budget and making sure that they work with someone to help optimize that budget for all of their goals is really the most important part,” Zanoni said.

Budgeting is all about finding ways to set yourself up for financial freedom. Starting now can really make a difference in the future.

Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company, Milwaukee, WI (NM) and its subsidiaries. Nicholas Verard Zanoni is an insurance agent of NM.

Hilarey Wojtowicz is the senior career and finance editor at Swirled, a lifestyle newsletter and website that helps millennials learn everything they need to know in order to truly start adulting.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

The Penny Hoarder Promise: We provide accurate, reliable information. Here’s why you can trust us and how we make money.

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