Budgeting Tips for Beginners

Are you wanting to improve your personal finances and begin setting financial goals? Are you wanting to start saving and aren't sure what to do? If yes: Well, we’re midway through that year (if you can believe it) and we wanted to check in on your progress. Maybe you stayed the course and are totally on top of your short- and long-term goals, or maybe you’ve fallen off track just a bit. Either way, we’re here to give you that push to keep up the good work or get back to it — and how to do it!

On the other hand, if you skipped the whole “new year, new budget and financial goal-setting” thing at the beginning of the year, that’s okay, too. We’ll show you some effective ways to better manage and allocate your budget starting today, with our midyear roundup of budgeting tips just for you.

First things first: Start by creating a budget.

Meeting a long-term financial goal first means being specific about that goal — starting with creating a plan with your personal budget that will get you to your end game. The word “specific” is the key; you’ll be more successful when you say, “I want to save enough to buy a new sofa that costs $X” rather than, “I want to save money this year.”

So where to even begin, especially when you want to make a major purchase down the road? Hint: It’s easier than you may think, especially with our how-to on creating a budget that’s right for you. After you know what you’re working with, you can explore your options of how to get from this Point A to your Point B — like the tried-and-true practices listed below!

When creating a budget, it's important to use all the tools at your disposal. This means using a budget app or creating a budget worksheet. These tools can help you track your spending and make sure you're staying on track to meet your financial goals.

Do away with credit cards.

To remain committed to your financial goals, you’ll want to remove obstacles that could interfere with your progress. One of the biggest challenges for many people is weaning themselves off of using credit cards, which make it much too easy to rely on and therefore accumulate debt — fast. Having no credit card debt will mean no more minimum payments to factor into your budget, zero hassle with fees or high interest rates, and much less stress and worry.

But if you think that not using a credit card means that it will be harder to make large purchases for your home, we have some good news: There is a win-win way to get those items without increasing your budget or your debt (It’s our next tip!).

Shop with brands that offer the no credit option*, like Acima.

Our passion is helping customers enjoy the name-brand, quality home items they deserve by offering an alternative to financing that works no matter what their real-life budgets might be. That’s why our leasing solutions prioritize the no credit option*, because it allows our customers to get their merchandise now and make affordable payments over time. For example, if buying furniture is your end goal, you can use lease-to-own* instead of traditional furniture financing at many of your favorite stores to get that furniture now and pay later.

If you’ve never explored this method of shopping, we encourage you to try it out!

Plan for emergencies.

While planning for a future purchase is a noble goal, part of having an effective (and realistic) budget is planning for the unknown and taking care of yourself, first and foremost. That way, you don’t have to dip into savings account or pull that credit card out when you’re suddenly faced with an unexpected expense —which could range anywhere from car repairs to a sudden job loss. Instead, you can take care of it knowing you’re not adding more debt to the situation.

Creating an emergency fund and adding to it becomes easier to do once you make a habit. Make small goals at first to make it doable, even if it’s just setting aside a few dollars every month and building from there. Many companies that offer direct deposit for paychecks will allow employees to split their take-home pay into two different accounts; it’s a great way to “pay yourself” automatically without having to think about it.

Have a no spend day (or week).

It’s most often the small, temporary sacrifices that bring the greatest long-term rewards — that’s a great mindset to have in using this very effective money-saving tactic. Give it a try, and you’ll be surprised at how quickly allocating a few days out of the month as designated “no spend days” can put things into perspective.

Granted, it can be easier said than done, given all the things that scream for our attention and tempt us to spend frivolously in the moment. But you’ll begin to prioritize where your money goes, what you consider to be an “essential” purchase, and what you can truly wait on until another time — or until you discover you don’t really need it at all. Once you see how well it works to put that unspent money toward your financial goal instead, you’ll be motivated to keep it up and lower your overall monthly expenses. 

Find a Way to Increase Your Monthly Income.

In the simplest form, being able to save more money is done by one of two ways: Spend less or earn more. So if you're hesitant to cut back on your spending or have already cut your spending and still are able to save, it might be time to find ways to make some extra money.

There are a number of ways you can do this, but it will take some effort on your part. From finding a side hustle to selling items you no longer need, there are a number of ways to make some extra money each month. If you want to try to make more without finding something new, you could also go to your current employer and ask for a raise. While this might not work all the time, it's worth a shot and can help you save more money each month.

When in doubt, prioritize important categories.

That might look a little different from person to person, but the basics like food, shelter, utilities and student loans should be at the top of that list for anyone who is trying to meet a financial goal. Like with the emergency funds we mentioned earlier, these “nonnegotiable” expenses should be built into any financial plan and prioritized to ensure that your necessities are always covered.

If you’re not exactly sure where you are spending your money, make a list of what you regularly purchase and categorize those items as either a necessity or a “nice to have” item. Then, track how many times you’ve spent money on each over the last few months (or as you go over the next few months). If you discover you are forfeiting the basics to spend your money elsewhere, it may be time to step back, reassess your spending habits and recommit to keeping your financial goals (and family budget) on track.

Build a Plan for Your Future.

It’s never too early to start saving for retirement. In fact, the sooner you start, the more likely you are to have a comfortable nest egg when it’s time to retire. Prioritizing the future by contributing to a 401(k) or IRA account is one of the smartest things you can do with your money, especially if you are young. When you still have a lot of time left before you retire, time can be your greatest asset.

If you are able to contribute just a little bit each month, it can add up quickly, thanks to compounding interest. If you don’t have access to a 401(k) at work, there are other retirement accounts available, like an IRA. You can open one of these on your own and make contributions as you are able.

Making retirement planning a priority can be difficult, especially when you’re young and have other financial goals you’re working toward. But if you can find room in your budget to contribute to your future, it will pay off immensely down the road.

Celebrate small wins until you reach your goal.

Sticking to a budget isn’t easy, otherwise everyone would do it. So, when you reach a mini-goal or milestone, take the time to recognize it and celebrate your progress. You’ll be surprised how much momentum this one action will give you to keep going!

Also keep in mind that you may take one step forward and two steps back all along your journey … but hey, that’s life. Don’t let small setbacks take your eyes off of your ultimate prize. Envisioning yourself enjoying the rewards of your hard work is also a great motivator. Then with consistent discipline, determination and these tips, you’ll make it happen before you know it.