5 (+1 Bonus) Tips On How To Stick to Your Personal Budget
Budgeting -
Committing to a new personal budget is an admirable step, and you should never be discouraged from getting your finances in order. However, we know all too well how difficult it is to stick to the budget that you’ve created. Whether the problem is unrealistic goals, insufficient record-keeping, or loss of interest, the vast majority of budgets fall by the wayside without providing the intended benefit. If you’re planning your first personal budget, don’t despair! With the right mindset and some proper planning, you can create a budget that is easy to follow and provides substantial benefit to your financial well-being.
1. Be Reasonable
Every budget is created with specific goals in mind. Some are focused on reducing debt, others on maximizing investments or saving towards a major purchase. For your budget to succeed, your goals should be realistic. You can set a goal of saving $10,000 by the end of the year, but if you only have $1,000 of expendable income per month, you’re going to have a difficult time reaching that goal. Likewise, if you’re expecting your investments to pay off big with five-figure profits, you’re going to have to put in a significant chunk of your own money; financial growth doesn’t happen on its own.
2. Think Short-term
Staying on track with a budget is a daunting task for any length of time, but it’s even harder to stay focused when you’ve got your eye on an event ten years down the road. If your biggest goal is to become a homeowner in five years, break up that goal into smaller benchmarks that you can focus on in the meantime. By setting frequent attainable goals, you’ll stay motivated and on track with your healthy financial behaviors.
3. Get Back on the Horse
Nobody is perfect, and just about everyone has fallen off the proverbial horse when implementing their first budget. The most important moment, however, is what happens immediately after you make a regretful purchase or miss a debt payment. Financial miscues can lead you down a slippery slope, and a determined mindset and positive attitude will help you to get back on track towards your goals. Everybody makes mistakes; how you move on from them will determine your success.
4. Focus on What You Can Control
This recent post makes a great point related to maintaining a healthy budget. It’s much easier to control your own spending than to create additional income. Focus on the aspects of your budget that you can control rather than those you cannot. This strategy will help you to avoid frustration which will in turn allow you to stay on track with your budget.
5. Reward Yourself
Every difficult task is made easier with the right incentive, and budgeting is no different. When you set your financial goals, create matching rewards that you’ll enjoy when you’ve reached the mountaintop. Here’s a critical point: your reward should not be related to money. The last thing that you want to do after achieving significant savings progress is to blow all of your earnings on a frivolous expense. Instead, choose a reward that costs nothing: a relaxing day off in a local park or an indulgent night binge-watching your favorite movies. (Of course, the reward doesn’t count if it’s something you do regularly!)
Bonus. Look to the Experts
With so many personal finance experts in the world today, there’s no reason to re-invent the wheel when it comes to your own record-keeping. Check out public budgets posted by experts in fields relevant to your budgeting. For example, if you’re planning for an upcoming vacation, see if you can find a public budget posted by a travel expert that has visited the same place. Your job becomes a lot easier when you can see what someone else has done.