Tips on making budgets work
The easy part is done, you made a list of all expenses made the last couple of weeks.
Now comes the hard part ...
You have to make a budget ... and stick to it.
This lens will give you a few tips to make and actually succeed at sticking to the budget.
Tip 1 : Make realistic targets
A budget is of no use if you just cannot stick to it.Making realistic targets is a must. But this is a very personal matter.
For example, a target could be making your own dinner or lunch every day. For some people this would be a small effort, for others, it is just not possible.
Make a list of achievable targets, review them with your family and only leave those you think are attainable.
Tip 2 : Put everything down on paper
A mental note about your budget or targets is a sure way for failure.Note everything down on paper, so you can be reminded whenever you see the list.
Write down your budget plans together with your targets. If you happen to succesfully complete a target (for example: Save 10% on electricity) you can mark the target to motivate you.
Tip 3 : Review and adjust your budget
Every month, compare your budget with the actual spent amount. When there are big differences, check out if the expenses made were really needed and possibly the category was underestimated in the budget. If this is the case, there is no harm in changing the budget and sticking to the new figure.
Another point is not to give up when you didn't make the budget in a certain month. It might be there were unexpected expenses, it might be you got sloppy when spending the money. Just evaluate, and adjust accordingly.
Another point is not to give up when you didn't make the budget in a certain month. It might be there were unexpected expenses, it might be you got sloppy when spending the money. Just evaluate, and adjust accordingly.
Tip 4 : Don't forget the occasional expenses
Daily, weekly and monthly expenses are quite easy to estimate. However, you budget will horribly fail if you don't take the occasional expenses into account.Those birthdays, vacations, car maintenance, scool supplies, ... will make your budget fail if not properly estimated.
As a simple result, you should make a yearly budget and plan those occasional expenses in the month they will occur. With just montly budgets, you won't make it.
Tip 5 : Motivate yourself with rewards
Set some short term goals in your budget. If your target is the reduction of your debt by 40% in 2 years split it up to 10% every 6 months for example.After a short term goal has been achieved, give yourself a reward. Budget isn't all about pain and restriction. When you achieve a portion of a goal, go out, celebrate or buy yourself a nice gift.
Rewarding yourself will give you the extra motivation you need to succeed.
