People know that a budget plan is necessary but you will be surprised that they are still unable to implement it properly in their lives. Some of them may have started to create one but failed to commit to it.
The problem usually lies in the fact that you failed to create a budget that you can stick to. If you think that creating a budget plan is the easy part, then you need to revise your expectations. It is something that you have to constantly work on – otherwise, you will end up with a budget that is not complementing your current lifestyle.
To avoid that, you need to make sure that you are continuously doing certain tasks. It can admittedly be tedious but that is to be expected if you want to make it as realistic as possible.
4 important steps for successful budgeting
Some people think that they can make the budget plan once and that is it. That is the wrong assumption. If you are having problems sticking to you budget, you may want to look over these 4 important steps because these are the tasks that you need to do continually. These are the essential tasks to make and keep your budget plan foolproof.
The first task that you must always do is to monitor. That is the purpose of your budget – to help you track the activities of your money so you can ensure that it goes to where you want it to be spent on. The crucial part is monitoring your expenses while you are creating your budget plan. This is necessary to ensure that the expenses on your budget are based on realistic figures. However, once you have the plan in place, do not think that the monitoring ends. You still need to continue monitoring it to see if it is working or if you are following the budget as planned.
Another task that is neverending is organizing. As you implement your budget, you are actually organizing your finances to maintain your control over it. One of the best ways to grow your money and maximize its use is when you learn how to control your finances. If you know how much you have and where it all goes, it is easy for you to make even the most difficult financial decisions. An organized financial life will help you say no to purchases that you cannot afford or shift expenses so you can afford them.
The third essential task in is planning. It is called a budget plan after all. But do not think that your budget is just there to help you keep your finances organized for this month or the next. It can also include any long term plans that you have for the future. In fact, it is highly encouraged that you use it as such. If you want to buy a car, put it in your budget a year before you make the purchase. Or if there are annual or quarterly expenses that you have to make, spread it over the months leading to that and indicate it in your budget. That way, your expenses will not have to change so much.
The last task that you should keep on doing is to review your budget. When you created your budget plan, you have a certain set of goals and financial capabilities. That will always change. You need to constantly review your budget to anticipate all these changes. A friend or two who are getting married next year requires you to buy formal clothes and gifts. You may want to save up for that. Or you could be putting yourself on a specific kind of diet to lose weight. That will change your expenses. Always review your budget to make sure that it is still supporting the lifestyle changes that you are making.
Here is a video that discusses the details of setting up a budget. It includes the items that usually goes into your budget and the specific steps that you can follow to start your budget plan.
Tips to make a budget that is easy to follow
These four steps could seem like a tedious task but if you think about it, familiarity will make it easier. In time, you will get used to reviewing your budget on a monthly , weekly or even daily basis. You don’t have to spend hours doing it if you do not have to. Besides, there are several online tools that can really help make budgeting less of a chore. You have Mint or Pageonce that can be used for free. The latter involves a mobile application that you can carry with you all the time.
To keep your budget plan from falling apart, here are some tips that we want you to keep in mind always.
List the specifics. Never be vague about the details on your budget plan. Even if you are using the envelope budgeting system, you still need to list the specifics at the beginning. You want to make sure that the budget you allot for each category will not fall short.
Be realistic. The reason why you are encouraged to list the specifics is because you want your figures to be realistic. If you estimate, you can fall short of your budget and that could ruin your finances for that particular period.
Love your budget. It is admittedly tough for some people to stick to a budget because they feel like it is a restriction. That should not be your perception of budgeting. You need to change your mindset and attitude about it. Instead of feeling restricted, you need to think of it as a way to help you afford the things that you want to spend on why eliminating those that you can live without.
Get help or support from loved ones. It is tough to put yourself on a budget if your spouse, partner and other family and friends are spending extravagantly around you. Let them know that you are on a budget and encourage them to follow suit. The changes in your lifestyle brought about by a budget is only difficult if you are alone. If you have people making the change with you, it will be more bearable.
Always be prepared. Make sure your budget has room for savings. That is one of the ways that you can prepare for any emergency event in the future. Take advantage of your budget plan to prepare your financial goals.
- Give room for fun. The last tip is to make room for fun activities. Do not think that entertainment activities are a pure waste of your money. It is not. It does not have to be extravagant either. Just be smart about the budget you will make and budget for the fun activities that really matter to you.