5 tips to make and stick to a budget

​Sticking to a financial resolution can be challenging when our excitement exceeds our preparation. The excitement and drive to set a goal to get out of debt or save for a vacation is so valuable to help keep us going when we’ve taken some time to prepare and plan successfully. Here are my 5 tips to make and stick to a family budget in 2020. 

---

Zero-based Budget – My first tip is to set up a Zero-Based Budget, which is a method of budgeting where your income minus your expenses/savings/investing equals zero. You give every dollar a purpose or something to accomplish for you so that you have $0 left at the end of the month. This means purposely having $0 at the end of the month not because you’ve overspent, but because you assigned every dollar a job to do.
 
Categorize Expenses – Lot’s of people skip this critical step! Taking time to total your spending in categories like groceries, eating out, entertainment, and clothing is a simple yet critical step to make and stick to a budget. Once you have your totals, you can set an affordable amount in each category. Make sure to include financial goals as a category in your budget. If you’d like a new couch or a trip to Disneyland, they should become “categories” in your budget. There is no such thing as too many budget categories, just make sure every expense fits in somewhere.
 
Personal Allowance – Every family member (particularly spouses or partners but this is true for kids too) should have a set amount of money every month that they can choose to spend/save on whatever they’d like without asking for permission. This helps us maintain financial autonomy amongst spouses/partners and helps our kids experience financial decision making before they leave home.
 
PowerPay Debt – Making power payments is the most effective way to eliminate debt. A power payment happens when you finish making payments on one debt and instead of letting that money go back into your budget, you add that payment amount to the amount being paid on another debt and so on until you’ve paid down your debt in half the time and saved a ton of money in interest. Go to PowerPay.org, enter your information and get your free, personalized payment calendar that tells you when to pay what on which debts. It’s a free tool developed by USU Extension.
 
Educate Yourself - If you’re committed to personal finance in 2020, every tip above and more are discussed in detail in the PowerPay Money Mastery Online Course that I developed with two of my colleagues Alena Johnson, AFC, M.S., and Luke Erickson, AFC, Ph.D. Check out the details here! utahmoneymoms.com/course.