Money Talks, So Should You

3 tips for starting a budget

Renee DeGross Valdes
by Renee DeGross Valdes, Dimespring Contributor (@decaturwriter)

Want a life? Get a budget with these three steps.

Few people like to budget. But a budget keeps you in command of your finances — and your life.

There are different budgeting styles, from the classic pen to paper to the new world order where you can track your expenses with the help of an app on your cell phone. But no matter which style you choose, experts say, you must start by setting realistic short- and long-term goals.

READ: Six steps to a great financial plan

To get started, Georgia State University business professor Conrad Ciccotello offers these three steps:

  1. Set goals. Make a plan and set goals, whether saving for a down payment on a house or retirement, or an emergency fund.
  2. Track expenses and spending. For a clear picture of your spending habits, chart your fixed and required expenses weekly or monthly on paper, online or with a phone app, then track your leftover cash to see where your money is going. Look carefully at your credit card receipts or statements to ensure no amounts go unnoticed.
  3. Find your balance. Be realistic. Once you know your cash flow position, ask yourself how much you need to spend now and how much you want to save for later.

In the process, be honest with yourself, says Ciccotello, who runs the personal finance MBA program. “Are you all flash and no cash, or are you a guardian of your money?” Being stingy with yourself isn’t good on a regular basis. On the other hand, “A lot of people struggle with overspending, but it robs from your future lifestyle.”

There’s plenty of other advice on budgeting – and some of it is surprising.

J.D. Roth, founder and Portland-based editor of the blog Get Rich Slowly, suggests keeping a stash of cash around for frivolous things, because it helps you with short- and long-term goals.

“I have a bunch of cash in a drawer and that’s my mad money,” he tells Dimespring. “I call it an adult ‘allowance.’ I don’t feel guilty about spending that money.”

READ: Is it best to set a yearly or monthly budget?

What works for Houston blogger Crystal Stemberger of Budgeting in the Fun Stuff? She says don’t give up your must-have luxuries. Instead, budget them in alongside your mortgage or rent.

“I’m all about the fun parts of life,” adds Stemberger in a Dimespring interview. “We have a maid because it allows us more free time. My maid would be the last luxury expense we would get rid of. We would switch dog food brands and cut out cable before the housekeeper.”

Stemberger says she prioritizes activities and other entertainment she likes to do with her husband, then puts the cheapest stuff on top.

“I like to feed the ducks,” she says. “That would be one of my cheap fun things to do. I also like to go to museums when they open up on the free day.”

Here are some helpful links to resources and budgeting tools:

Sources: Federal Trade Commission, Consumer Federation of America, American Institute of CPAs, National Endowment for Financial Education, Employee Benefit Research Institute.


Renee DeGross Valdes is a veteran business journalist offering expertise in small business, personal finance and real estate. She has more than 20 years of journalism experience having worked for The Washington Post, Washington Business Journal, The Atlanta Journal-Constitution, TF-1 French Television, and Patch.