Budgeting has always been important – but it took a pandemic for many Americans to realize just how important.

4 minute read

Budgeting is more popular than ever before, according to a new Debt.com survey – likely because it’s proven to keep them out of debt.

It took a pandemic to convince Americans to keep track of their money. That’s the conclusion of a new poll from Debt.com. It revealed a surprising but encouraging statistic from 2019 to 2021: More Americans created a household budget more than ever before.

Debt.com has been asking Americans about their budgeting habits for years, and in 2019 68 of respondents said they used a budget. In 2021, that jumped to 80 percent and of those people almost 9 in 10 said that budget kept them out of debt.

Howard Dvorkin thinks he knows why: Simple you can’t save money if you don’t know how much you’re spending to start with.

That’s just basic common sense. Let’s face it budgeting your money isn’t as much fun as spending it, but the pandemic scared us all straight. I won’t say that’s a silver lining, because there’s no compensating for the human cost of COVID-19.

But if Americans keep a budget as life returns to normal then the country will be so much better as we start moving forward. Dvorkin is talking about staggering personal debt. Americans still owe $1.5 trillion in student loans and almost $1 trillion in credit card debt.

While there are many safe and high-tech apps and online tools that can help you budget, 6 and 10 prefer good old-fashioned pen and paper.

Less than 1 in 10 trust in technology. I understand that first result very well. We know what’s good for us, but we don’t always do it. We know that we’re supposed to eat well and exercise a lot, but that doesn’t always happen.

What perplexes me is the fact that more people haven’t embraced online budgeting tools and apps. Let’s face it they do the math for you – so budgeting isn’t as boring or even time consuming as it used to be.

I hope it won’t take another crisis for Americans to realize just how easy it is to make a household budget. If you want to learn how to create a budget – or if you have any other questions about your personal finances – check out Debt.com today. We can help you not only keep track of the money you have, but we can help you get out of the debt you’ve run up.

Visit our website, call us, and subscribe to our YouTube channel for more expert advice.

In 2019, Debt.com found that 68 percent of people budgeted. This year, the survey found that number is 80 percent. Plus, nearly 9 in 10 said budgeting is keeping them out of debt. Only half of non-budgeters said the same thing.

Financial experts say these results aren’t shocking, and the pandemic is responsible for the spike in budgeters.

“I’m not surprised that people are writing budgets more than ever,” said Allison Baggerly, founder of the budgeting blog Inspired Budget. “After 2020, many people have either been financially impacted or know someone personally that has been impacted. This has caused many people to be more aware of their spending and where their money is going.”

Photo courtesy of Allison Baggerly from Inspired Budget.

Baggerly has been budgeting for over nine years, which helped her and her husband tackle more than $111,000 of debt. She hopes that people will stick to the budgets they’ve created.

“I’m excited to see that people now, more than ever, are willing to make a plan for their money,” she said.

Fo Alexander, a certified financial education instructor and the founder of the blog Mama & Money, isn’t surprised by these results either.

“Uncertainty, such as a global pandemic, forces people to look more closely at their finances,” she said. “When you don’t know the future state of your employment or business, it will cause you to be a lot more conscientious of how you use your money.”

Alexander has her own experience with debt – she paid off more than $78,000 of student loan debt in less than three years. She says everyone should be budgeting in some form.

“It’s the best way to manage your money and keep track of your financial goals,” she said.

Photo courtesy of Fo Alexander from Mama & Money.

Tips to start budgeting

The Debt.com survey found that the top reason people don’t budget is they don’t earn enough income.

But Debt.com President Don Silvestri says that budgeting can help anybody regardless of income.

Don Silvestri, president of Debt.com.

“The best thing about budgeting is that it’s free,” he said. “If you’re not making much, budgeting can especially help you save more for retirement and emergencies.”

If you’ve never made a budget before, here are some tips to help you start.

1. Find a method you like

The survey found that 6 in 10 prefer to budget with just pen and paper. But if you’re more comfortable doing this digitally, there are plenty of apps and websites that will help you out.

2. Define your income and expenses

There are three types of expenses: fixed, flexible, and discretionary. Fixed expenses are costs that don’t change, like your rent or car payments. Flexible ones are necessities that change costs, like gas. And discretionary ones are things you want, but don’t need, like restaurants.

You should consider savings as one of those expenses.

3. Make adjustments to your budget

Your budget isn’t set in stone. If you need to up your spending limit on a certain category, you can make that change. But if you do increase your spending in one area, look at your budget and see where you can cut down in another.

Click here for 20 more smart budgeting tips.

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About the Author

Kristen Grau

Kristen Grau

Kristen Grau interns at Debt.com. When Grau is out of the office, she serves as the managing editor of Florida Atlantic University's student-run newspaper, the University Press, and is the Palm Beach County editor of South Florida Gay News.

Published by Debt.com, LLC