Did you know that the average American overspends by $7,429 per year?
Overspending is a very real issue many people struggle with, but for many of us, it’s also perfectly preventable. How, you may ask?
By establishing and following a weekly budget!
As boring as it might sound, taking some time to set a budget is the most efficient way to avoid getting to the end of the month counting the change in your pockets and anxiously waiting for payday.
Keep reading and learn everything you need to know about weekly budgeting!
Why Make a Weekly Budget
When people decide to start budgeting, they often choose to do it monthly. Mostly because many of us get paid monthly and have monthly expenses, like our rent and car payment.
If that works for you, perfect!
But with such a big period of time between budgeting sessions, it can become harder for you to keep up with your finances and easier to end up spending a bit more than you should.
If instead, you seat down to check on your balance every week, you can easily notice if you’re starting to overspend and just save up during the following week to compensate.
How to Make a Weekly Budget in 5 Steps
Now that you know why you should go for a weekly budget, it’s time to learn how you can make it.
If you’ve tried budgeting before, you might have a general idea of what you’ll need to do. If this is a completely new habit you’re about to adopt, it might seem a bit intimidating at first.
Either way, relax: budgeting doesn’t have to be a complicated process at all.
Here’s how you can do it in five simple steps:
1. Determine How Much You Earn
First things first, it’s important that you’re aware of exactly how much you make.
So start by writing down all your sources of income, whether it’s just your single job or some other side gigs. Add up the amount of money you make with each after taxes.
Note: In case your income varies each month, just do an average of what you got during the previous two or three months.
2. Add Your Expenses Together
You know how much you make, now it’s time to know how much you spend.
On this second step, start by adding your fixed expenses, so things like your apartment rent, mortgage, insurance, car payment, and others. In short, payments you make every single month.
Then consider your monthly unfixed expenses, like groceries and gas, and add them together as well.
Finally, add both numbers to get your total expenses.
3. Subtract Your Fixed Expenses from Your Earnings
The third step is easy: take the number you got on the last step and subtract it from your total income.
You shouldn’t get a negative number as a result: that’d mean you’re living way above your means. Instead, you should have some money left for security.
4. Divide Your Unfixed Expenses
Look at the unfixed expenses you wrote down on the second step.
If you’ve been spending more than you earn, this is where you’ll need to cut down. So, if necessary, make some changes.
Once that’s done, divide each category of expenses by four, so that you get how much money you can spend on different things during the week. So, if you typically buy $300 of groceries per month, you know you can spend a maximum of $75 per week on that category, for instance.
5. Track Your Spendings Every Week
Once you know exactly how much you can spend on different things, you need to keep an eye on your spendings to make sure you actually stay on track with your plan.
Consistently writing down your budget and expenses on an Excel document is a great way of making sure you never overspend again.
3 Useful Budgeting Tips
No matter how motivated you might be about budgeting on a weekly basis, we all know how easy it is to lose track of your spendings.
To prevent that from happening, it’s useful to know certain tips and tricks like the following:
- Be realistic
There’s no point in setting a budget if you’re not realistic, so try your best to stick to your numbers.
Keep in mind that, at the beginning that might mean that you won’t be able to eat out or go shopping as often as you’d like. But in the long run, you’ll start seeing your savings add up and you’ll have more financial freedom than you’ve ever had.
- Use a calendar
Checking your calendar while you take care of your budget can be a good idea for two reasons.
Firstly, because you can check the events you have each week. From birthdays to date nights, and more: if you know what you have planned, you can set the right amount of money apart for each event.
Secondly, you can use your calendar to meal prep and save on your grocery spendings. The average American spends $4,464 every year on groceries but with a little planning, that number can easily go down!
- Use an app
Smartphones are great for leisure, but you can (and should) also use them to stay organized. There are plenty of apps that can help you track your expenses, so give them a try until you find the one you like best.
This will make it even easier for you to always follow the fifth step of weekly budgeting, as you can add each of your expenses on the app as soon as the money leaves your bank account. No more excuses!
Staying Within Budget Has Never Been Easier!
Budgeting never sounds like fun. Not only because it’s work, but because it’s always a bit scary to find out exactly how much we spend each week.
But following a weekly budget will do nothing but give you more financial security and, ultimately, help you save money to start living the life you’ve always dreamed of living.
So why not start this week?
If you’d like to learn more about how you can solve and prevent financial problems, make sure to check our Finance Resources!