Setting a budget is relatively easy. Sticking to it, though, is where things can get tricky.
All too often, budgets fail. Either we don’t have enough motivation to keep to them or our plans aren’t outlined clearly enough. Sticking to your budget can be especially challenging if you aren’t truly convinced that you want (or need!) a budget in the first place.
While you might not be having immediate financial woes, it’s never a bad idea to get onboard with a budget to put away money for unexpected emergencies or to save up for a future, long-term goal. Setting a budget doesn’t always mean limiting yourself or going without. Instead, it’s about giving you control over your finances—allowing you to see where your money is going—and why. Being on top of your finances will allow you to direct your money where you want it to go instead of constantly being frustrated by dwindling funds at the end of each month.
If you’re looking for ideas to set a budget that you can stick to, here are some tips for creating one that you’ll be able to get behind.
Define the Reason for a Budget
Without a true understanding of why exactly you need a budget, it will be difficult to stay on track. For this reason, it’s important to identify your reasons for establishing a budget in the first place, and to clarify with yourself about what your goals are. Are you looking to gain more financial freedom? Are you tired of feeling stressed about money? Do you have a bigger, long-term goal that you are trying to save for? Having a clear picture in mind of what you’re saving for will help the rest of your financial goals to fall into place.
Understand Where You Spend
To help set yourself up for success, it’s important to gain a clear picture of your financial situation. Identifying where you’re spending money will show you areas that you can cut back, and places that you may be able to save. Personalizing your budget to your specific needs—and making sure you budget in enough for expenses—can help you set a realistic budget, enabling you to stay on track longer.
Tie Your Finances Together With Your Long-Term Goals
Your budget shouldn’t be separate from the rest of your life. Instead, it should be closely connected with your long-term goals, as well as short-term expenditures. This means ensuring that all of your finances—including your savings, giving, and other expenses—are all connected. With a long-term goal in mind—such as a new home office or a much-needed vacation—you’ll be able to look at your daily choices in a different way. You’ll clearly see how spending money on immediate purchases can add up and impede your savings plan long-term.
Track Your Progress
It’s also important to assign a timeframe to your savings plan and break your goal into doable targets. Mark these down in your Day Designer. Having dates connected with your goals will allow you to track your progress against preset weekly and monthly milestones, allowing you to ensure that you’re on track and making headway.
Keep Moving Forward
Finally, while you may not reach your short-term goals every time, it’s important to keep moving forward. Instead of feeling discouraged, or berating yourself for failing, remember that these things take time, and one mistake doesn’t mean that you have to throw in the towel! Instead, stick it though. Soon your hard work will pay off and you’ll be able to see progress.
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It is never too late to start saving and tracking your money. And instead of trying to save simply for the sake of saving, try to be specific about your long-term goals and track your progress by setting clear milestones. Remembering why you’re saving and anticipating tangible results will allow you to establish a budget that you’re happy to follow—leading to better success in the long run.
If you’re looking for a fresh start or hoping to get on top of your finances, why not make this the year that it happens? Start by downloading our free Bill Pay Checklist—a simple way to keep track of your outgoings, and ensure nothing is forgotten.