Talk It Out
When you’re creating a budget, it is important to communicate with anyone who may be involved.
Communication is necessary in order to make sure the budget is clear for all parties. By talking out every detail, it allows everyone to take part ownership in the success of the budget.
Wondering how to organize it?
Utilize websites and mobile applications such as Mint and You Need A Budget, to help you through your budgeting process. Take the time to analyze your spending habits and see what areas need improvement.
Setting goals is vital to achieve success.
When budget, it’s important to understand your spending.
Where do you spend the most and can it be reduced?
When you have that level of clarity you’ll be able to identify areas of improvement and decide what can be changed. Giving all of your goals clarity and not leaving any room for interpretation is a huge step.
For example, if you decide that a goal is to “eat out less,” define what “less” means.
Is it eating out only once a week?
Two times a week?
Instead of saying you’re going to “save more,” write down an exact amount of money you are trying to save each month. Avoid terms such as “less” or “more” and give yourself a definitive number.
Compromise is Key
Make sure to listen to all parties involved and do what it takes to achieve a common ground.
There may be areas of the budget that you find unnecessary, but that others may not want to budge on (and vice versa). If everyone doesn’t agree on the budget, look to make a compromise.
When only part of the household is on board with the budget, it is less likely to be followed through. Setting and keeping a budget is a team effort.
It’s not ideal to create a budget that won’t work within your day-to-day lifestyle.
For example, if you have a long commute to work or school and driving there is your only means of transportation; don’t create an unrealistic allowance for gasoline. It is also important to realize that your spending will change from month to month.
Make sure to take into account all of life’s factors— planned and unplanned.
Have you thought about holidays, trips, school supplies, oil changes and anything else that could pop up?
Factoring in a buffer amount will help when unexpected expenses happen. Plus if you don’t use the buffer portion of the budget you can put that into savings or treat yo’ self.
It is important to also celebrate little wins for staying on budget.
Let’s take a look at some common examples:
If you know you’re going to be attending an out of town wedding in October, make sure your October budget is prepared for those extra costs.
If you know that your electricity bill is going to increase during the winter, make sure your budget is prepared for those changes.
Creating an unrealistic budget that doesn’t fit into your life will be frustrating and make it harder to follow through.
Hold Yourself Accountable
Sticking to a budget can be challenging at first, but holding all individuals accountable is vital.
Periodically go over the budget with everyone involved so that everyone is on the same page. Working together as a team is the best way to approach sticking to the budget.
However, if you are the only person involved, you can hold yourself accountable by letting someone else know your budgeting goals. Then ask for them to keep you in check.
If you see something at the store that you absolutely cannot live without, sleep on it for a week before pulling the trigger. Whether you are creating a budget to spend less, pay off debt, save for a house, or pay for college, having the willpower to stick to your budget is an important part of the process.