Now that you’ve created a personal budget and you’re ready to improve your personal finances, your financial future might seem bright. But creating a budget is just the first step, you have to stick with your budget to realize your financial goals. Fortunately, sticking with a budget is easier than you might think. But this will require some work and sacrifice on your end.
1. Shop with a list
It doesn’t matter if you’re shopping for groceries or buying household items for your home, always bring a list. This keeps your shopping focused, and you’re less likely to make an impulse purchase that can result in overspending.
2. Remind yourself of financial goals
Sticking with a budget can help you reach financial goals, such as saving up to buy your first place or drumming up enough cash to pay off debt. But as time goes by, you might slowly forget about your financial goals, at which time your urge to spend money might grow stronger. To avoid this temptation and stick with your budget, always keep your financial goals in mind. Write them down on a sheet of paper and post them in plain sight. When you feel yourself going off track, think about your goals and ask yourself, is this purchase worth delaying my goals?
3. Use a cash only system
When you use a debit card or a credit card for purchases, it’s easy to go over budget. But if you carry cash, and you only bring enough cash to make a specific purchase, you’re less likely to overspend.
Consider using the envelope method. Have a designated envelope for each spending category and deposit a certain amount of cash in these envelopes. You might have one envelope for fuel, another envelope for groceries and another envelope for entertainment. If you feel the envelope system is a bit old-fashioned, get a prepaid debit card and deposit funds you’ll need for groceries, entertainment or gas. This method keeps these expenses on budget, and you don’t have to use your credit card or bank debit card as much.
4. "Sleep on" every purchase
Impulse shopping is one of the biggest ways to fall off budget. For everything you’re contemplating buying, leave the store and "sleep on" the purchase. Typically, the desire to purchase something weakens once the item is out of sight. After a good night’s sleep, you may no longer have a desire to spend money.
5. Get frugal friends
It’s hard to stick with a personal budget when you’re close associates spend money frivolously. You don’t have to remove these people from your life, but you owe it to yourself to befriend people who share your financial mindset. Therefore, you can encourage each other to save money, and together you can find cheap ways to entertain yourselves.
6. Eliminate bad spending habits
Bad habits can throw your budget off track. For example, if you start a routine of getting morning coffee on your way to work each day, you can easily spent $15 a week on gourmet coffee, which is about $60 a month. Also, if you get into a habit of eating out with your coworkers every day or several times a week, the money you spend can reduce your cash flow, and you might come up short when it’s time to pay bills.
7. Don’t deprive yourself, but be sensible
Some people take budgeting a bit far and they don’t allow room for any fun. Major sacrifices can help you reach financial goals sooner, but you also run the risk of experiencing frugal fatigue.
With frugal fatigue, also called frugal burnout, you become so deprived that you eventually crack and go on a spending spree. So, rather than extreme budgeting, be sensible and allow yourself a splurge from time to time. It doesn’t have to be an expensive purchase. Enjoying small indulgences on occasion makes it easier to stick with the budget.
8. Keep your receipts and analyze your spending
To stick with a budget throughout the month, it’s important that you regularly analyze your spending to see where your money goes. This is the best way to know whether you’re sticking with the spending plan. Regularly check your bank accounts to review recent transactions, and monitor your credit card activity to make sure you’re not overspending in various categories. If you realize that you’ve overspent in certain areas, make the needed adjustments to reduce spending in these areas, which keeps your budget on track.
Budgeting may not be the most exciting task, but if you’re looking to improve your personal finances and maintain cash in your bank account, creating and sticking with a budget is the first step to success.
Photo Credit: Education Save Money, by Chris Potter, via Flickr