Budgeting your money usually ends up like going on a diet; you start it with the best intentions to follow it through, but two weeks in and you’re back to your old habits. So how do you make a budget and stick to it? How do you ensure that you follow through with your financial plan? The best way to budget is to make a plan and stick to it. Now, this is definitely easier said than done, so try using these tips to help you make a budget that will be easy to follow.
- Identify why you’re budgeting. If you’re choosing to budget because someone told you it was a good idea, you probably won’t stick to your plan. The reason to budget is that you want to make sure that you’re spending less than you earn. Don’t think of it as a solution to your financial problems; think of it as a roadmap to help guide you adapt your spending habits to keep you from financial problems in the future.
- Track your spending. Although it’s not the primary goal of budgeting, if you track every penny that you spend for a week it will open your eyes to all of the little expenditures and how quickly they add up over time. It may also help you identify areas of spending which have gone unnoticed.
- Start from the beginning. If you’ve never built a budget before, start with your basic monthly expenditures; bills, gas, and food. Then ask yourself how much you want to save each month, and how much money you want to have leftover to spend. Once you have these building blocks, the foundation will allow you to build a more specific budget.
Save before you spend. Instead of waiting until the end of the month and saving what’s left over, set aside the money you want to save at the very beginning of the month, and then spend what’s left so you ensure that money is going into your savings.
- Use different accounts. If having a lump sum of money sitting in your bank account is often all-too-tempting, try using a different account for each category of your spending. Separate the money for bills, savings, and spending so that you can only see the money that is available for you to spend.
- Give yourself some wiggle room. If you mess up and go out of budget, don’t beat yourself up. Mistakes happen. The best way to avoid them is to give yourself some wiggle room. Overestimate when it comes to bills, and set aside a little money for slip-ups so that if you spend a little extra, you don’t go over budget.
- Make sure your budget is adaptable. Odds are that you won’t make the perfect budget on your first try. Make sure that you can tweak it and change it if need be. You also won’t have the same exact bills to pay forever, either. If your budget foundation is good, you can use your old budget model to build yourself a new one to incorporate new or changed expenditures.