4 Ways to Ensure You Stick with Your Budget
When it comes to personal finance, you’ve probably heard the advice a dozen times. Master the art of budgeting and you’re on the right track. There’s just one thing most people often miss. Yes, making a budget seems simple and easy but it’s the execution most people fail at.
To help you avoid the same financial pitfall, below are tips and tricks to guide you when creating a budget you can stick with.
Keep it real
If you want your budget to work, you need to keep it real. In other words, be as realistic as you can be. Otherwise, you’re only setting up yourself for failure.
Start by grabbing a notebook and pen. Record the amount of money that’s coming in per month and all your expected expenses. Deduct your savings and work with what’s left. The goal is to live within your means by budgeting what’s left after savings to cover for all your expenses.
If the money isn’t enough, you’ll need to make sacrifices by cutting some on the luxury category and focusing on what’s necessary. If the money is still isn’t enough then you might want to find another job or a part time gig to add to your total monthly income.
Don’t be too hard on yourself
The goal is to live within your means but don’t be too hard on yourself. Yes, you should keep your finances in sync with what you’re bringing in financially but you should also leave room for small failures.
If you were not able to stay within budget this month, don’t beat yourself up. Try again next month. If it seems that staying within budget is proving to be more difficult than expected, give yourself some breathing room. Better yet, enlist the help of a financial advisor to help you during the first few months of mastering the art of making a budget.
Make a list of all your spending
In order to know which area you’re overspending and which area needs extra attention, you need to make a list of all your expenses. Every purchase you made this month should be duly and diligently recorded on your expense notebook.
From food to rent, gas, utility bills and other expenses, every penny spend should be on record. Yes, doing so may sound like its too much work but the effort will pay off eventually. You don’t have to do this forever anyway. As soon as you get the hang of things and you can stay within budget without glitch, you’re free to forego this part of making a budget.
Prepare for unexpected expenses
One of the reasons why most budgeters fail is because they don’t prepare for unexpected expenses. In order to make your budget work, you need to include a category dedicated to unexpected expenses. They don’t happen all the time but it’s best to have all bases covered if you want to stay in line.
Set aside a portion of your budget for unexpected expenses each month. In fact, it’d be better and highly recommended if you open an account solely for this purpose. You can then call that your emergency fund.
When you’ve done due diligence and stuck to your budget like any good consumer, a reward is in order. This is especially important if you’ve had a tight budget and made it work. Treat yourself but without going too far. Maybe you can go out and enjoy a good night with friends. Or you can finally buy that new dress you’ve been eyeing for weeks. Or better yet, take a vacation. The type of rewards is up to you, just make sure of course it stays within budget.