How To Create a Budget That You Can Stick With
Getting finances under control is difficult for many people. However, you need to keep a reasonable plan for where your money goes, or you’ll find yourself struggling to accomplish your goals in life. Learn critical tips that can help you create and stick to a budget.
Determine Your Long-Term and Short-Term Goals
A key way to maintain the motivation to stick with a budget is understanding why you want to do so. Decide what you really want out of life and why you want it.
Of course, you don’t want to be overly aggressive with your plans and desires. If you’re unrealistic, you’ll find it too challenging to stick with the program.
Help yourself visualize and remain committed to your goals by writing them down. Doing this also helps you adjust your budget as necessary and refine your objectives as you progress.
Work backward from your desired result to create actionable benchmarks. Ask yourself:
- “How much money do I want to leave behind for my family?”
- “How much do I want to have in my accounts at retirement?”
- “Where do I want to be financially in 15, 10, and five years from now?”
- “What do I want to accomplish over the next year?”
Getting specific about each step helps you stay on track.
Figure Out Your Outgo
You next need to understand where your money is going. Review your monthly credit card statements and checking accounts. Many banks now provide breakdowns of your spending by category, which you can use to understand your spending patterns.
Use a spreadsheet or software to monitor and manage these expenses going forward. Have categories for your housing, meals, student loans, and transportation costs.
Don’t forget to add in seasonal and annual expenses, such as vehicle registration, medical visits, and home maintenance items. Prepare to save for these on a monthly or weekly basis.
Calculate Your Income
Now you need to know how much you’re bringing in every week and month. Remember to work with your gross income and not your pretax wages. Factor in the money that comes from other sources, such as bonuses, investments, or tax refunds.
When you put together your income and outgo on paper, congratulations! You have a budget. It likely won’t be the numbers you want to see yet, but you have a starting point to start making positive changes.
Decide Where You Can Make Practical Adjustments
Review your income and expenditures and decide where you can direct your money to meet your objectives. For example, you may be able to cut out a little recreation each week. If you can save only $25 a week, you already have $100 monthly to improve your situation!
Additionally, find ways to boost your earnings. Can you take an extra hour or two of overtime? If you work a little harder, could you qualify for bonuses or additional commissions? Extra effort on the job or a side hustle could give you enough to make a dent in your debt and start saving for the future.
Follow a Regular Schedule for Review
Many people start budgeting but have trouble sticking with it. Keep yourself focused with daily, weekly, and monthly reviews of your finances to see how you’re doing. Then make realistic changes that help you keep moving forward.
Celebrate Your Victories
You should take pride in what you accomplish and reward yourself. If you deny yourself completely, you might give up in frustration. However, remember to be reasonable about how you celebrate. You wouldn’t want to overdo it by splurging and setting yourself further back financially.
Hold on to the account information you had when you started your budgeting journey and compare your initial situation to your current progress. Bask in the positive feelings of moving toward your goals. Then imagine how good it will feel when you finally accomplish your original objective. Complimenting yourself on your dedication helps you stick to your routine.
Wisely managing your money is one of the best things you can do for yourself and your family. Use these pointers to take control of your finances now.