Creating a budget for your lifestyle is easy. Sticking to it, on the other hand, is hard. Regardless, you’ve got to be brave enough to create a budget and stick to it if you want to reach your money goals. So, come on then. Let’s talk about how you can do it!
Connect your bank account to an app like Mint to start tracking your spending. You’ll be amazed at what you discover. Although it’s hard to look at spending, be brave. You’ll be glad to learn somethings aren’t as bad as you’d expect and also to discover areas to save. Read on to learn 6 tips to get manage your budget!
1. Start by Setting a Budget You Can Actually Keep
Extremes never work – whether it’s a hardcore diet or a really restrictive budget. Deprivation often backfires when budgeting and the leads to disappointment or simply giving up. Instead of creating a drastic budget, consider setting yourself up for success by being realistic about your spending.
Instead of eliminating entire expense categories, like going out to eat or gym fees, start by putting some basic parameters on your monthly spending in each category.
It might take some time to find the exact budget amounts that work for you and your lifestyle, but you can always adjust as needed. And you can always challenge yourself to get more savvy and find greater savings later on.
To get yourself started though, any budget savings you can stick to, even if it’s just a few dollars to start. You are already on the right path, even if it’s a small step.
2. Track Your Money
As nerve racking as it is, and as freaked out as you might first feel doing it, you’ve got to track your spending. Keep it simple, and just use an app like Mint. Mint is secure and flawless, endorsed by major companies. You can tie it to your bank account, credit cards, and any other loan you might have, like your mortgage or your car loan.
Mint offers a cool web interface and also the ability to download all of your bills into a excel spreadsheet. You can add categories or tags too. Understanding where your money is actually going at the end each day.
Checking in with your numbers regularly will allow you to track your progress throughout the month and make adjustments as needed — before you get too far off track.
3. Build Financial Goals Into Your Budget
In addition to your tracking your expenses, be sure to build your financial goals into your budget. If you want to buy a new car, move into a nicer neighborhood, or go on a shopping spree, then consider being honest about your wants. It’s ok to want more, and it’s great to plan for those larger purchases, expenses, and splurges!
We all spend, and that’s ok! If you are able to chart and plan for incremental larger expenses, and plan for bigger budget goals, you’ll end up doing a better job managing your budget in the long run. You’ll be able to save and keep to your budget, know that you are planning and saving for bigger investments or vacations.
4. Save Before You Spend
It’s easy to overspend if you’re not setting up your savings account first. Consider budgeting for your financial goals, setting aside the needed funds before you ever get the chance to overspend!
Remember, pay yourself first! Your savings and long term budget decisions, like a 401K plan or vacation budget, should be set aside first.
That way, you can only spend what’s leftover in your checking account after saving. You won’t feel like you are deprived and you won’t feel like you are depriving yourself – two major things that get most finance conscious people off track.
5. Avoid Impulse Buys
A good rule of thumb is to create an easy rule for yourself when it comes to anything above $100. Instead of simply buying that new TV or laptop you see at Costco, because it’s been drastically reduced or maybe you just want to treat yourself, promise to wait 24-hours before making the purchase. You’ll be so glad you did.
If you really want the item and it’s a deal you can’t pass up, then just put the item on hold at the store. Most stores will hold your item for exactly that time, 24 hours. It’s surprising how the next day you’ll come back and realize it’s not absolutely important ot essential that you have it.
You’ll be glad you waited and weren’t lured into buying due to a 25% reduction or the amazing layout of the store and in-the-moment spontations decision. he next time you’re tempted to buy something. If you sleep on it, you may find that in-the-moment urge to buy fades away.
6. If You Haven’t Yet, Define Your Why
Ultimately, the best way to stick to your budget is to remember why you set it in the first place.
Was it to prioritize your journey to debt freedom? Or to give you the confidence and security you want to start you own business? Or build the savings you need to put the down payment on your dream home?
That way, when you’re tempted to buy some shoes you can’t afford or some tacos that don’t fit into your spending plan, you’ll remember why, and be more likely to stick with your money plan.