For most people, creating a budget isn’t all that difficult. In a short time, you can create a plan for the way you’re going to spend and save money. Despite the ease of making it, most people struggle with following it and staying on budget!
When you don’t stay within budget, you overspend. Regardless of whether you forgot to include some key types of expenses or had a rough few months, consistently going over budget causes stress. Not only will you worry about paying bills on time, but it will strain your ability to achieve your long time financial goals, too!
If you’re like most people, you don’t want to experience more stress, especially when you have enough already. Instead, you’d rather feel more at ease and know that your needs and wants will get met!
Besides relieving financial stress, staying on budget also gives you confidence in your spending plan. It shows that your plan is working and that you’re moving forward. As long as you can stay within budget, it’s only a matter of time before your dreams will come true!
Here are 7 easy ways to stay on budget, so that you can achieve your long-term financial goals!
A budget is an important part of your financial foundation. It establishes how you’re planning to use your income to spend and save money. But, even with a budget, there are no guarantees that you’ll execute your plan!
However, by tracking your spending, you can determine whether you’re staying on budget or spending out of control. Reviewing your monthly expenses will show how much of your allotment has been spent as well as the balance you have to go. Using this data, you can make spending adjustments that can prevent you from going over budget, altogether!
When you monitor your spending you also bring awareness to your financial position. It helps you to identify your emotional spending triggers as well as the places where your spending feels excessive. Having these realizations helps you to cut back and stop wasting money on them. As a result, you’ll have more funds to put towards things that matter, like your goals!
Many of the busy professionals that I work with find that it’s helpful to break their monthly spending down by the week, too. In doing so, they’re able to disperse money more evenly throughout the month. This way, they’re not overspending and aren’t forced to be extra frugal with money at the end of the month, either!
One easy way to track your spending is by signing up for Personal Capital. In minutes, you can connect your accounts to its platform which will reveal your spending history. Once you’ve done that, you only need to open the app every so often and check your spending, so that you can stay on budget!
There’s no quest that small day-to-day purchases can add up and take a toll on your savings ratio. But more often than not, big ticket items end up doing the most financial damage!
When it comes to a major purchase, your emotions can cause you to act rashly. Rather than thinking it through, your emotions encourage you to justify the purchase and buy on impulse. Not only can this bust your budget for the month, but it will likely impact your ability to be on budget for the foreseeable future, too!
In the heat of the moment, large purchases feel exciting. You might imagine how they’re going to make you look and feel, causing you to spend more than you should. But time and again, these feelings are short-lived and will begin to fade. Yet as they do, the large monthly payments will remain!
While a large purchase is subjective, it’s important to determine what it means to you. In doing so, you’re establishing a spending threshold. Anything below that amount you’re comfortable spending, but anything above will need to be delayed and have further consideration.
In some cases, like urgent medical treatment, you may not be able to put the purchase on hold. Still, when possible it’s best to take your time and move slow. This way, you can do research, weigh your options, and process your emotions. If your excitement fades after a few days, then you may have gotten caught in the moment. Or you might not have needed or wanted the product as much as you initially believed!
When it comes to making a purchase, especially a large one, it’s important to consider all the costs. Too often, people focus solely on the monthly payment and that mistake may prevent them from staying on budget at all!
Whether you realize it or not, many of your purchases have hidden costs. They may have acquisition fees, ongoing maintenance, or need future repairs. When you consider them all, your purchase may no longer be within budget. Instead, it could be over and you’d need to cut spending in other areas to reach your monthly savings goal!
The two largest expenses that most people go over on are housing and transportation. While everyone needs a place to live and to get around, going over board crosses the line from being a need to now becoming a want. Not only that, but some people buy these items as status symbols, too. They’ll go deep into debt and forgo their freedom simply to try and impress others!
When making a purchase, consider the total cost so you can stay on budget. Explore maintenance/repair costs, usage fees (like gas), and potential future upgrades. This way, you’ll have a truer cost of ownership which allows you to more accurately see how it fits into your overall budget. Not only that, but you may realize that you can’t afford the item or that you’ll need to make some spending adjustments so that you can!
It’s a common money myth that budgeting is all about spending money. In reality, a budget is a financial strategy that helps you save more of it!
Many times, people struggle to save money because they put it off. They go about life and don’t think about it until the end of the month. But by then, it’s too late!
Rather than putting it off, consider making savings a priority by paying yourself first. To do it, save a portion of your pay before any of it’s spent. This way, you’ll have enough money to meet your monthly savings goal. Not only that, but you’re setting yourself up to live below your means, so you can achieve your dreams!
It’s easy to pay yourself first, too. Using financial automation, a portion of each paycheck can get deposited into your savings or retirement accounts. By setting it up, you’ll save without ever having to think about doing it!
Living beyond your means and going into debt is a ruthless cycle. Not only does it handcuff you to a job and limit your freedom, but it also robs your future. When you spend money that you don’t have, you’re forced to sacrifice time so you can pay it back with interest!
Plain and simple, if you can’t pay for material goods in full, then you can’t afford them. Instead, try practicing financial discipline. With it, you’ll learn to save which will allow you to pay for the item all at once in cold hard cash!
Also, there’s nothing wrong with spending money and buying something that you want as long as it’s within budget. The problem arises when you go into debt to get it. After all, once you borrow money, you become a servant to the lender!
Most households consist of different money personalities. For instance, one partner may be a saver while the other is a spender and these differences can cause strain over how the family’s finances get handled.
In addition to that, one spouse usually gravitates toward being fiscally responsible for the household budget. They may do their best to take control and set spending limits, but without their partner’s input they likely won’t come in on budget at all!
To stay within budget, both spouses need to be included in the process. Rather than one partner trying to convince the other to adhere to their budget, it should be done together. This way, each partner can give their input, and together they can reach a consensus.
Many couples choose to have regular household finance meetings or money dates, too. This gives them time to discuss what’s going well and the improvements they can make. Not only that, but healthy discussions about money can help everyone get on the same page and tackle common goals, too!
Nonrecurring costs and other irregular expenses are additional reasons that people struggle to stay within budget. Since they’re infrequent, they’re often forgotten. Then once they’re realized, you could be left scrambling to find fast cash!
However, planning for the month ahead can help you stay on budget. Rather than being in for a surprise, it allows you to anticipate and plan for your upcoming expenses.
One way to plan ahead is to organize your finances on a money calendar. WIth it, you can see everything that lies ahead. If you need to adjust your spending to pay future bills, you can because you still have time and that alone can help you stay on budget!
For some people, it’s particularly challenging to stay on budget during certain times of the year, like the holidays. The added expenses can put pressure on a budget that’s already tight!
However, it’s important to realize that these are regular expenses. They occur every year and therefore you can anticipate them. Rather than panicking to come up with cash, use reserve funds and save for them over time!
Staying on budget can be difficult, especially at first. Through trial and error; you may need to adjust your budget categories, curb your spending, or even include more fun money.
Regardless, over time you’ll discover what works best for you. When that day comes, you won’t just be on budget, you’ll be proactively working towards your dreams, too!
Are you struggling to stay on budget? Work with me, I’d love to help you succeed with money!
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