Have you ever wondered why it’s so hard to stick to a budget? Isn’t it amazing that the more money we make, the more we seem to spend? I understand that circumstances change and sometimes we may be too busy to stay accountable or stick to the decisions we make financially; but if you plan on living a comfortable life and having the opportunity to spoil yourself or your family during retirement, you absolutely have to start with something as basic as a budget you can really live with. So here are my ten secrets to starting a budget that works:
1. Identify why you want to start a budget.
Be sincere and have your reasons written down where you are constantly reminded of them.
2. Determine your income and expenses, then start your budget.
Don’t inflate your income or minimize your expenses. Once you know what money comes in and where it goes, you can start a budget and see where to cut back. Be sure to account for furry friends like me! Try my Budget Worksheet to get started.
3. Pay yourself first.
As you start a budget, make sure that you have an expense area called “personal savings.” You work hard for your money, so try to start saving at least 10% of what comes in monthly.
4. Set goals that you can hit.
If it’s your first time starting a budget, you shouldn’t plan on retiring next year. Give yourself weekly, monthly, or quarterly goals.
5. It’s okay to reward yourself.
A lot of people feel guilty if they are trying to keep a budget and occasionally splurge on themselves. As long as it doesn’t ruin your overall progress, it’s okay to spend money on yourself. What fun would life be without a new squeaky toy every now and then?
6. The twenty-one day rule.
Author Steve Covey says it takes twenty-one days to develop and adopt a habit. Give your budget at least thirty days to see areas of improvement.
7. Make adjustments if necessary.
Whether you are making more money or an unexpected expense comes up, it’s important to adjust your budget to include the extra cash or expense. That way you’ll stay on track with your money.
8. Use a tool that keeps you accountable.
You can start with my handy Budget Worksheet to see all of your expenses typed out. You might even consider finding a professional who can implement a strategy for you.
9. Be flexible.
Having a budget doesn’t mean your finances will be perfect. Things may come up that throw you off a little bit, but your budget will be the lighthouse to your financial ship. Give yourself a little wiggle room, and don’t panic if your finances fluctuate here and there. Just remember to account for any unexpected expenses to keep your budget on track (see Rule 7).
10. Communicate your budget, dreams, and intentions to your family.
Budgeting does not have to be a “solo” journey. If you have a family, let them know why there’s a budget and explain the rewards they could possibly attain by implementing one.
Now you are free to get started on your journey of budgeting!