The monthly budget is one of the most common types of financial planning tools. This is a budget where you decide how much money you spend in different categories within one month. As most people receive payments by the week or month, this overview budget provides a big picture of assets and liabilities. A daily budget works the same way but it allows you to really focus on day-to-day purchases. Creating a daily budget can be effective because it will be a daily reminder to you that you need to be on track with your personal budgeting goals. It does take some work but the savings you see can be truly amazing. These budgeting tips will help you with your daily spending patterns.
- Track your spending. The first step to creating a successful daily budget is to keep track of your spending. You need to either keep your receipts or write down the money that you spend every day. This includes small purchases such as a soft drink up to large purchases such as new furniture. It includes cash, checks, and credit card purchases. What it doesn't include is your bills, or your fixed expenses. These need to be tracked using a monthly budget. We are creating a daily budget here, and that means we are keeping track of your variable expenses, or the expenses that change all the time. Keeping track of all this can be a very daunting task but it is necessary. Before you can create your daily budget, you need to see how much money you are spending so you can make reasonable demands on yourself. You need to keep track of your spending for at least a week--even longer, such as a month, will give you even better data to work with. Keep your receipts and records neat and organized by date because the next step will be to make this data you are collecting meaningful, and that will be much easier to do if you are organized.
- Figure our where your money is going. You have tracked your spending, and you have your records and receipts to prove it. Now you need to take this data and make it meaningful to you. Look at the information for the first day you kept track of your spending. You may have bought a coffee and muffin on the way to work for $4.32. On your morning break, you got a soda at the vending machine for $1.00. At lunch, you went out and spent $8.39. After work, you stopped and got some gas for $34.69 and some milk at the store for $2.39. You look at the other days and you see that every day you get that coffee and muffin. You buy sodas almost every day. You go out for lunch a few times a week and the gas and the groceries really vary.
- Decide what you need and what you want. You have figured out that on average you spend $4.00 on breakfast each morning. You need to eat breakfast but do you have to eat it out all the time? A need is something that is necessary and a want is not. You need to be honest with yourself when you are deciding if your items are a need or a want. You may decide that you want to lower your breakfast cost to only $1.00 per day by eating at home before you leave in the morning. You decide that you can lower how much you spend on sodas at work by bringing your own to work and keeping them in the office fridge. You decide to limit yourself to eating lunch out to once a week and then the rest of the time you can bring your lunch. Gas is a need to get where you need to go but combining errands can help cut this cost. The groceries are needs but look for brands that may cost less and look at sales. These are just examples of ways you can create your daily budget. However you decide to make the changes is a very personal decision and it is up to you. Make sure that you write down what your new budget is so you can stick with it.
- Implement your budget. This is the tough part. You need to follow the budget that you've set. Resist temptation and keep in mind that you will be saving lots of money by making these changes. If you feel like it's too much, then concentrate on one change at a time. When you are comfortable with that change, then begin work on another one. If you find that you just can not keep to a restraint that you have established for yourself, then be realistic and go back and make changes to your budget to reflect that.
- Seek additional help. If you find yourself still struggling with creating and maintaining a daily budget, then it is time to seek additional help. There is a wonderful book called Make Your Paycheck Last: How to Create a Budget You Can Live With by Jason R. Rich. I also love the software program, Microsoft Money 2006, which includes an enhanced spending tracker that makes it easy to track your expenses.
Creating a daily budget is a necessary personal budgeting and financial planning task for anyone who wants to curb her daily spending. These budgeting tips can help. You will be surprised at how much you are saving in the short term, and therefore how much you can save for your long-term goals, simply by keeping track of your spending and creating a daily budget.