Budgeting is back in style.

“Good budgeting requires the concurrent use of some type of financial tracking system,” says Steve Martin, president of Martin Wealth Management and a financial planner based in Ft. Collins, CO. That’s because budgeting is all about comparing what’s coming in with what’s going out, and how closely that tracks to your projected income and expenses.

Discover Bank recently shared its top tips for budgeting with their customers. Here are a few of the highlights:

Get personally involved with your money. It’s hard to earn, particularly in a recession. So it’s even more important that you watch your pennies and understand where your cash is going.
Distinguish between your wants and your needs. Think about every purchase no matter how small, and make sure it’s necessary. If you don’t need to buy it immediately, you may not need it at all.
Learn to appreciate deferred gratification. If you think you “need” something, wait a week or two to be really sure you aren’t making an impulsive buy. This will also give you time to shop around to see if you can find it for less online or if you can use a coupon to save more on the purchase.
Make a spending pact. Make a pact with your spouse, partner, parent or friend that neither of you will make any purchases over “X” dollars without consulting with each other—this gives you time to consider whether you really need the item. The dollar amount of the pact will vary, based upon your financial situation or the type of purchase. Be careful not to set the dollar amount so high that it exceeds what you typically spend anyway and defeats the purpose of the pact.
Direct-deposit your savings. The easiest way to save is to have money deducted from your pay before your check is issued. Martin suggests putting away as much as possible through company-sponsored plans, like a 401(k). Then, ask your human resources or benefits manager if you can have some of your pay direct-deposited into a high yield account in an institution other than your primary bank. Discover Bank’s AutoSavers Plan makes it possible to deposit small amounts of money into a high yield money market account weekly, bi-weekly or monthly. Funds are transferred directly out of your checking account into your money market account. Call Customer Service toll-free 1-800-347-7000 for details.
Don’t buy without a plan for payment. If you’ve planned for your purchase, it’s fine to use your credit card to get cash back or other rewards. But if you’re mindlessly blowing money, you could quickly get out of sync with your budget.

Read the full article in the Tips and Advice section at Discover Bank’s web site.

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