The following is a guest blog post:
It’s easy to get the motivation to start budgeting for a week or two, but it can be more difficult to sustain that momentum over a longer period of time. If you’re truly committed to your long-term financial goals, it’s critical to keep budgeting even when things aren’t going as well as you planned.
It might be tempting to go over your budget when you’re in a tough financial situation, but you’ll thank yourself later if you have the discipline to stick to your budget. These tips will help you keep your financial goals in mind when you’re thinking about spending beyond your budget.
Start with Realistic Expectations
The easiest way to keep your budget going over a long period of time is simply to start from realistic goals. Many people try to make immediate, drastic changes to their spending habits, but it’s better to make small, gradual changes you know you’ll be able to maintain.
First, thoroughly examine recent bank statements to see how much you’re currently spending. From there, you can target realistic changes each month rather than trying to reach your goals overnight.
If you’re currently spending most of your disposable income on nights out, for example, start by staying in one or two extra nights that month. At the end of your first month budgeting, reexamine your initial goals to make sure they’re still achievable. Once you start making small changes, it will become a lot easier to keep adjusting until you’re where you want to be.
Budget for Major Purchases
It’s simple to budget for things you buy every month, but expensive one-time purchases like cars, gifts, and travel can be more difficult. If you don’t take these into account a few months in advance, they could sneak up on you and derail your entire budget.
If you’re planning to buy a new car in six months, for example, start saving for the down payment today rather than right before making the purchase. It’s much easier to spread out the impact of these purchases than it is to get the money together at the last minute.
Furthermore, disregarding your budget to buy something expensive makes it a lot tougher to stick to the budget throughout the rest of the month. Once you decide to start budgeting, it’s important to include every purchase.
Focus on Debts
Paying down debts isn’t the most exciting way to use your paycheck, but it’s often the most financially responsible. Debt grows every month you don’t pay it off—and in the case of credit cards and other high-interest debts, each month you wait could add significantly to the balance.
With that in mind, debts should always be one of your top priorities when budgeting. Rather than spending money first and putting the extra cash toward your debts, make these payments the first thing you do with your paycheck. Calculate how much you can afford to pay down and include it in your budget each month.
It’s easy to set up automatic contributions, and these can help you avoid the temptation to spend money you need to use for debts. Just as automatic tax deductions protect you from spending money you don’t have, automatic credit card payments make sure you put the right amount toward your balance each month.
Use an App
There’s nothing wrong with budgeting using a pen and paper, but having access to your budget from your phone makes it that much simpler to stay committed. With such a wide range of budgeting apps available for both iOS and Android, it’s easy to find one that matches your needs.
Many of these mobile applications come at little to no cost, and you can also sign up for a free trial with some services to test out an app before you commit to a subscription.
Budgeting applications automatically categorize your purchases and allow you to view how much money you spend in each area. This makes them the perfect way to get started, as you’ll be able to identify your worst spending habits immediately. Try a new application for at least a month to learn its features and determine whether it’s right for you.
Ask for Help
It’s sometimes easy to give up on your budget if you’re working alone, but it will be much more difficult if you feel accountable to someone else. Talk to a close friend or family member about your financial situation and ask them to regularly check in and make sure you’re sticking to your goals.
If you let this person know why budgeting is so important to you, they’ll also be able to remind you of your financial priorities and help you see things from a more balanced perspective. It’s important that you find someone you trust—they should always have your best interests in mind.
Measure Your Progress
Budgeting isn’t always fun, but you’ll feel a lot better about your spending habits if you keep track of your bank statements and identify tangible results. Even if you save just forty extra dollars in the first month, knowing that you made some progress will help you keep that momentum going into the next month.
Consistently evaluating your progress also makes it easier to tell if you’ve fallen back into bad habits. You’ll be able to correct these issues more quickly and ensure that you keep moving forward. The mobile apps mentioned above enable you to track purchases by category, so you’ll know if your spending went up in a certain area.
The first few days of budgeting can be exhilarating, especially if you feel like you’re moving in the right direction. On the other hand, it’s easy to get off track when you fall into financial trouble or have to make major purchases. These tips will help you focus on your long-term goals and stick to your budget even when you’re tempted to spend more than you should.