If the arrival of the New Year has inspired you to make some positive changes to your lifestyle, then you might be considering ways that you can improve your chances of sticking to a successful budget. The right budgeting strategy can help you to take control of your finances and achieve your saving goals so that you don’t have to struggle each month just to make ends meet.
Budgeting not only reduces some of the stress that we all feel when it comes to managing bills, but it also means that you can start to save up for the things that matter most to you. With a little bit of budgeting, the perfect family vacation or a new computer could be just around the corner. With that in mind, here are seven tips for budgeting that anyone can use.
- Start Early
When it comes to budgeting, it’s never too early (or late) to get started. A lot of people think that they don’t have to worry about managing their money until they’re in their own house or they’re saving for something important, but a budget can help anyone to achieve true financial freedom. Remember that although it can seem like a pain in the neck to sit down and get all your finances in check, you will eventually reap the rewards of careful spending. There’s always budgeting apps out there that can help you to do the math.
- Know Exactly What You Spend
If you want your budget to be effective, then you can’t afford to simply “guess” at anything. Instead, you’ll need to put the effort into writing down all your expenses for each month and comparing it to your average income. Remember, you’re not just looking at the money you spend on food and rent, but also the cash that goes on meals out with friends, and your morning coffee. The more precise you can be, the better.
- Set Some Goals
It’s easier to keep yourself motivated on the track to safe spending if you have a goal in mind. Your aims can either be long-term or short-term depending on what you want, just make sure that you have something to strive towards. Maybe you want to worry less about cash overall, or you’re saving for the wedding of your dreams.
- Monitor your Progress
The power of budgeting is measured in countless small successes. Make sure that your spending is staying in line with your restrictions by monitoring how well you’re doing along the path to your goal. You might want to break up a long-term goal with smaller milestones and give yourself a date for when you want to achieve them. For instance, if you want to save £1000 by the end of the year, you should have at least £500 by June.
- Have Someone Hold You Accountable
Ultimately, you don’t have to answer to anyone but yourself, and the banks if your spending gets out of hand. However, it’s often easier to accomplish something if you’re not doing it alone. Give yourself someone to be accountable to, such as your partner, or your friends, so that you’re not as tempted to fall off the wagon. If you know that there’s someone in the background cheering you on, it’s often easier to find the motivation you need to accomplish your goals when the going gets tough. Choose someone special to help you keep your eye on the prize. Alternatively, you could always try to start budgeting as a family unit.
- Expect the Unexpected
Remember, when you’re budgeting, you shouldn’t just be putting money away for the everyday expenses that you’ve gotten used to over the months, but the things that could happen without warning too. Starting a rainy-day fund that can go alongside your savings should mean that your entire budget doesn’t get thrown out of balance when something goes wrong, such as when your washing machine breaks or your car needs a quick repair.
- Celebrate Every Win
Finally, remember that positive reinforcement can go a long way towards helping you achieve your goals. If you want to improve your chances of success, then give yourself some leeway to celebrate every time you hit a milestone on the path to your goal. This doesn’t necessarily mean giving yourself free reign to over-spend, but you might treat yourself to something inexpensive, like a cheap takeaway, or a small trinket that highlights your accomplishments. Even a pat on the back can help to keep you motivated.