Tips To A Successful Budget
When it comes to budgeting, it takes an effort to continue on the correct path. Many fail because they are not all in. Once a goal is accomplished, they think “okay cool, no more need for that.” What about the next goal? Here are some tips to keep you on your budgeting path.
Budgeting 100%: For the Budget to be successful, ensure all funds are accounted for. Before spending money, it needs to be allocated for on your budget. If additional money is received, make sure it is included in the budget.
Partnership: If you are married or in a serious relationship, make sure you are budgeting together. Share with each other your goals and wants to make it a joint budget. Budgeting is complicated, and if both parties are not in the same page it is a recipe for disaster. If you are not in a relationship, find a budget buddy to help hold each other accountable and also celebrate each other’s successes.
Evolving Budget: It is important to keep in mind that your budget will not be the same month to month. One month there may be something you want to do, like go on a vacation or make a special purchase. Plus, holidays and special occasions should be accounted for in the budget. The idea is to prevent items or needs from surprising you.
Debt: It is important to not just include minimum payments of debt, but creating a plan to pay debt off as quickly as you can. It is a good idea to focus on the items with highest interest first, as interest rates increase your debt over time. Also look at the debt that has the highest monthly payment associated with it.
Tighten and Loosen the Belt: Some months you may have a goal that you are striving to complete. If it is a debt item that you are wanting to check off your list, or something special you want for yourself. It is important though to not do that every single month. This can lead to burn out. Don’t forget to reward yourself on occasion, especially when a goal or milestone has been reached!
Emergency Fund: Set aside a little money every month for those unexpected items that may come up that we have no way of planning for. Life can be unpredictable, knowing that there is a little money set to the side can help relieve some stress during those times.
Credit: A goal of the budget is to not have to rely on credit cards, but utilizing cash. Take those credit cards out of your wallet and either stash them somewhere or cut them up all together.
Goals: One of the most important things when it comes to budgeting, GOALS. Goals will provide you with direction. Goals should have a timetable for completion, and should be both short-term and long-term goals. With each goal that is achieved, celebrate and then create a new goal. Remember goals just don’t have to be paying off a debt, but a vacation or new clothes…anything you may want or need.
Patience: It is very important to have patience when just starting out. Budgeting needs to be personal for you. What works for one person, may not work for you. When starting out, there may be mistakes, and that is okay. Keep with it and always personalize your budget to you. Learn from your mistakes and adapt. It needs to be a reflection of your wants and needs!