How many times have you heard the statement, ‘it is easy to make and stick to a budget’? Well for some, it may be true. However, you may be struggling with staying on track with your budget. You cannot remember how many times you have gone over-budget. You have probably mastered the art of making one but it is sticking to it that seems to give you a run for your money, no pun intended. So how about you take a step back from feeling guilty and look at how you can make the process simpler. How can you make sure you stick to your budget?
Create a Realistic Budget
We all want to be smart about our money. We want to do what we think we are supposed to do; earn money, save, and invest. So we set a budget around that. The only problem is, you may be lying to yourself. You want to go on that lunch date, buy yourself that shoe or go on a vacation. We see those options as derailleurs to our financial goals so we never include them as we budget.
However, because we are human, you will go to that event or buy that coffee thus you spend more money than you had initially planned to. You need to stop looking at these activities as the enemy. There is nothing wrong with doing them. They are part of life. They only derail you when you do them more than you should. Actually, if you are enjoying yourself, you will feel less tempted to go over budget.
Keep Goals Visible
You budget so they can realize your financial goals. You want to be in control of your money as opposed to it controlling you. Make a list of the reasons you made the budget and make sure it is easily accessible to you at any time. You can even make a vision board of your financial plans. This will serve as a deterrent anytime you feel that you want to use the money you have not budgeted for.
The moment you budget you commit to allocating money to different areas. The moment the money runs out for one activity, you must adopt the mentality that you have no more money. Remember, your budget is not supposed to be a form of self-deprivation but the key to financial freedom.
Track Your Spending
If someone wants to lose weight, they pay attention to what they eat and what they do. Tracking is a great way to keep your eye on the prize. Find a way to track your spending on a regular basis. It could be using mobile applications or checking on bank statements. This allows you to ensure that your spending habits are in line with your budget. It is also a powerful way to reinforce your financial truth by assessing your progress. Additionally, you are able to see where the weaknesses in your budget and you can rectify that the next time you make one. The goal is progress, not perfection.
Make an allowance for unexpected events
Life is uncertain and you cannot predict the future. No matter how airtight your budget is, sometimes some issues arise that force us to spend more than we had planned to. Give your budget wiggle room in case you encounter any such issues. They can pile up very quickly and it can be difficult to pay for them. The good news is, if there is money left behind from your unexpected events allowance at the end of your budgeting period, you can always divert it to other areas. Maybe your travel kitty or savings and investments.
Separate your businesses
If you have different businesses, you can often think you have more money than you actually do. So even if you do a budget, you tend to think you have money to spare. The best option is to try and separate your businesses. Allow each business to stand on its own when it comes to either income or expenses.
This not only helps your budget but it helps you analyze your businesses on their own. If you can, get separate debit cards. If you need to go out, carry the card with the money you had intended to spend. Having all your cards at once will tempt you to overspend. Sticking to your budget is about discipline. You master that and it will be a lot easier to stay on track.
A budget should be part of your financial plan. Check out Planning for the future: How to create a Financial Plan