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7 Budget tips to keep your finances on track all year long

Living within a budget is fabulous in theory. Spending less than you make means more money stashed away to accomplish goals or prepare for emergencies. 

Actually living that way, though, is easier said than done. In fact, a 2013 study by the Federal Reserve Board said only 53 percent of respondents felt they could cover a $400 emergency expense without borrowing money or selling possessions.

If you’re one of many who would like to put some extra cash away this year (and let’s face, it — who wouldn’t?), follow these steps to live within a better budget.

1. Keep a record

Write down every single penny you spend for a month — or at least for a week. Taking a good look at all of the places you spend money will help you to realize where your money actually goes, and will force you to notice all of your unnecessary spending. Small amounts of money add up to big bucks over time, and this will help you identify possible areas to cut.

2. Cut in three categories

Once you’ve identified your spending patterns, find three categories where you can make cuts and monitor those categories closely. According to Forbes, common over-spending categories include clothes, restaurants and gadgets. Figure out your week spot for spending and make an effort to save money in those areas.

3. Pay your bills on time

If you’re one of those people who consistently pays bills late, stop. Lots of late fees tacked on to multiple accounts add up quickly, and mean your bills take way more out of your budget than they should. Take advantage of automatic bill pay systems to help stop this habit in its tracks.

4. Avoid temptation

If your goal is to spend less money, don’t torture yourself by waving all those things you shouldn’t buy right in front of your own face. Cancel all those shiny, tempting catalogs, and stop killing time by strolling through the mall. If you don’t see it, you can’t buy it, right?

5. Grocery shop with a list

How many times have you walked into the grocery store for “just one thing”, only to come out an hour later with a full cart? Plan all of your meals for the week, and shop just once, sticking strictly to the list to avoid over-spending on groceries.

6. Reward yourself

Use a credit card with a great rewards program to add extra money to your wallet, or to splurge every now and then without busting your budget. Not all rewards cards are created equally, so take some time and look at the fine print before signing on the dotted line. Look for a card that rewards your kind of spending, and offers rewards you will actually use. If you’re not sure what you should be looking for, take a look at Capital One’s Rewards Barometer insights to see what other rewards card holders want most from their cards.

7. Save first

Instead of saving what you have left at the end of the month, put your savings first. You’re less likely to spend it if you actually have to transfer money out of savings to get to it.

This post was sponsored by Capital One.

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