Setting a budget and sticking with it is hard, especially when money is tight. With bills coming in and only so much income to pay for them, it can be a challenge to set long-term financial goals that are actually attainable.
Fortunately, there are several tried-and-true strategies that can help you create a budget, and more importantly— stick to it. Here are a few ways to get started coming up with a budget plan that works for you and your family.
Keep track of your money
It’s impossible to know what you can afford without keeping track of your money. This means tracking what’s coming in and what’s going out. If you have one job, the first part is easier— just note your monthly income. If you have multiple jobs and side gigs, this is where having some sort of spreadsheet or tracking system can help. At the end of every week, take a minute to note what you earned.
You’ll also want to note down all your essential bills. This includes things like rent, groceries, health insurance, anything you can’t live without. Seeing these numbers on paper (or on a screen) will help you determine what’s left, and what can be put towards your savings goals or used as extra spending money. By prioritizing your must-haves first, you’ll also guarantee that you never come up short for those important items.
Set goals
Now that you know a bit more about your monthly earnings and spendings, it’s time to set some long-term financial goals. Although it’s a great aspiration, not all of us can afford the recommended annual retirement savings. But the most important thing when it comes to retirement, is to start saving. Pick a goal that makes sense for you financially, and get in the habit of putting that money aside every month. Organize your savings into emergency and long-term savings accounts, and pick an amount to save every month that you can actually afford. Maybe your goals are lower than you’d like them to be at first. But the point isn’t so much about the money, as it is about getting into good financial habits. Once savings becomes a normal part of your financial routine, it will feel easier— and become a lifelong practice.
Trim your expenses
Nobody likes to go without their favorite things, but sometimes trimming your expenses is an important part of coming up with that extra income needed to pay bills or contribute to savings. Take an honest look at your budget and decide how much you can afford in monthly spending money. This will be the money you can use for extras like eating out, shopping, or even just grabbing your favorite iced coffee. Knowing in advance what you can afford will help you stick to an amount, and prioritize what you truly want to buy that month. It also guarantees that your money goes towards all the important things (like bills and savings) before splurging on the other stuff— and you’ll enjoy that extra spending more knowing you can actually afford it.
Remove temptation
One of the best ways to stick to your budget is to remove temptations. Maybe that means unsubscribing from your favorite store’s emails or catalogs, or taking a different road home that doesn’t take you past your go-to takeout spot. It might also mean skipping trips to the mall and avoiding the places you know you’ll want to spend money. Whatever you can do to remove temptation from going over budget, do it. By stepping back from these tempting environments for a while, you’ll be able to hold onto more of your money— which will help you solidify your budget and stick to it in the long term.
Keep your eye on the prize
In all of your budgeting practice, be sure to set some long term goals for yourself. Maybe your goal is to become a homeowner, or to pay off your credit card debts. Whatever it is, having this goal will help you keep your eye on the prize— especially when the temptation to go over-budget arises. By having a long-term financial goal, it becomes easier to say no to other types of spending and stick to your budget. After all, owning a home or becoming debt free will bring a lot more happiness than some overpriced coffee.
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