If you have been budgeting for years now and the process is second nature to you, then this post is likely not for you. But you can still read on, as you may get a tip or two to make budgeting even easier and more fun for you. For the rest who struggle with budgeting, never did it before, or are interested in getting started, read on, and you will likely get enough to get you started. Budgeting, for those who have mysteriously never bothered to learn about it – or will pretend like you just came out of a cave – is simply the process of creating and managing a plan for your income and expenses. The idea is to spend within your means, while ensuring all items on your budget are met.
Create one
First step to stick to a budget, is to create one in the first place! Without a budget, you have no idea what is coming in and out, and therefore, are likely spending more than what you have coming in.
Review your budget regularly
Just because you have a budget, doesn’t mean you follow it blindly forever. Yes, you do need to stick to it, but you also need to review it every every 6-12 months. This way, you can eliminate things, reduce or increase certain items etc.
Watch your spending
Go over your spending and see if there are any trends, where you are spending money on certain items more than others. For example, do you have too much of your budget going to subscription services (Netflix, Spotify, Prime etc)? If so, it is probably time to eliminate some of these, even if you are too used to them by now.
Use Cash or Envelope System
Consider using cash or an envelope system for certain budget categories. Withdraw the allocated amount in cash and place it in labelled envelopes for expenses like entertainment, dining out, or personal spending. This approach provides a visual representation of your available funds and helps prevent overspending. I have personally been using this and it is simple but extremely effective, given its visual nature.
Discipline and Reward
As sticking to a budget needs some discipline, be sure to build that muscle and have some patience. With the passage of time, things will get easier and becomes second nature to you. In fact, I have often preached about the liberating nature of budgets, as opposed to the popular belief that they restricts you from having a better and more fun lifestyle. On the other hand, be sure to reward yourself from time to time for sticking to a budget, but this is better done at the start of forming a budget than to make it a lifelong thing. As mentioned above, once you have planted this into your subconscious, sticking to it is a matter of autopilot, where little to no effort is required. And with that being the case, you don’t need to reward yourself for something that happens in the background and requires virtually no effort.
Keep in mind sticking to a budget requires commitment and consistent effort. It may take time to adjust and develop new spending habits, but with perseverance, you can successfully manage your finances and achieve your financial goals. This includes financial Independence, where money is longer a life stressors, as you have enough for it to fulfil all your needs and wants, with enough to spare.