How to Make and Stick to a Budget

Few things are easier to do than spend money. Who doesn’t know the feeling of looking over their accounts at the end of the month and thinking, but where has all my money gone? Between the endless unexpected expenses and the ever-mounting trivial purchases, we never seem to save as much money as we plan, and we are always spending more than we realize. This, of course, is what makes strict and diligent budgeting so important, and yet at the same time so difficult.

So for all of you out there struggling to fill up that piggy bank, but who never seem to make much progress, here are some tips for helping you successfully make and stick to a budget.

Stop Treating Yourself

This one goes at the top of the list because it is by far the most important, despite being a little obvious. ‘Treating yourself,’ as I term it, is the easiest way to destroy a budget. It’s that feeling of entitlement we always get after overcoming one of life’s little obstacles. Perhaps you’ve just worked a particularly long day at the office, helped your neighbor with her groceries, or finally managed to wake up without hitting the snooze button ten times. Often, no excuse is too trivial. Our natural tendency is to think, oh, well I owe myself this one little indulgence, and then make an unnecessary expenditure.

Recognize the urge, suppress it, and appreciate your achievements for what they are without feeling obliged to undermine yourself by buying an unneeded ‘reward.’ Even if you’re just spending a small amount each time, it soon adds up.

Keep a Written Account of Spending

It is easy to look at your online statement every month, see how much money you spent, and realize that it was too much. But nothing will open your eyes to your spendthrift ways like actually writing down the amount of money you use each day. So every night when you get home, sit down and list out every purchase you made. There are also lots of technological solutions to this problem, with an array of budgeting and spending apps available for all modern phones, tablets and computers. Total your expenses. Feel guilty. Spend less tomorrow.

Keep Separate Accounts

It helps to have a number of accounts: checking, savings, and a long-term savings like an IRA or a money market account. Every time you get paid, set aside the money you will need for living expenses during that pay period (plus a little extra for the inevitable unexpected expenses), and put it into your checking. Then divide the rest into your savings accounts. Absolutely refuse to transfer any extra money into checking before your next paycheck. Whenever you run a surplus, keep the money there as a cushion for next time. Try to steadily increase all the account, but under no circumstances allow your savings accounts to diminish.

Make Your Budget Realistically

This means taking the time to determine how much you actually have been spending in previous months (not just what you think you should spend in the future). Make the budget reasonable based on your habits, but also keep in mind that the key to successful budgeting is changing your spending habits. If you are violating your savings goals every month because of an unrealistic target, you are much less likely to take your budget seriously.

As we all know, saving isn’t easy. But with a bit of self-restraint and the diligence to always keep your goals in mind, anyone can stick to a budget without too much pain. The trick is to hold yourself accountable, and to always be intimately aware of where your money goes, and why.

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