5 Secrets to Sticking to a Budget

5 Secrets to Sticking to a Budget December 9, 2011

Got the budget blues?  If you’re someone who creates a budget and then throws it out the window weeks or even days later—not to fret, there are many out there like yourself.  Of course, money can be a headache and strict budgeting doesn’t always sound like a picnic in the park…but it’s time to revamp your financial lifestyle.

To take charge of your wallet and create a livable budget that will achieve you peace of mind and eliminate many financial worries, following the secrets below:

Secret #1:  Understand that a budget’s purpose is to help.

It’s easy to be fooled by common misconceptions about budgeting.  Maybe you’ve had trouble living with budgets in the past because you have the idea that they would completely change your lifestyle and you won’t be able to spend the way you please.  If you take this myth to be true, it is necessary to change your mindset.  Budgets are meant to help you become more financially-savvy, not hurt you.  Know that even millionaires have budgets and when you make yours, the truth is you don’t have to be as restrictive as you think…you can even have some “fun” built in.  Here are the reasons why you should embrace the concept of a budget:

  • Give you power and control of your money
  • Help to avoid living paycheck to paycheck
  • Reduce the stress about making payments on necessities
  • Decrease the possibility of falling into debt
  • Allow you to save

Secret #2:  Make a list of income and expenses.

To see how the money is coming in and how it is going out, it is crucial to outline your income and expenses.  First list the amount of take-home pay you receive each month.  After that make a list of all expected and necessary expenses you plan to incur.  These may include items like:

  • The roof over your head
  • Food
  • Keeping the lights on
  • Insurance
  • Transportation
  • Debts

After you’ve tallied up your monthly income and the costs you will be incurring, then subtract your necessary expenses from your income.  The number you get is the amount you have left for discretionary spending.

Secret #3:  Remember you cannot spend more than you earn.

This is the most important rule of budgeting so hold it at an especially high value.  When you spend more than you earn, you are deficit spending which means you are looking at a lifetime of being broke.  To avoid falling into a debt-filled pit of despair just compare your expenses against your net income.  If your bills are greater than your take-home pay then it is time to reconstruct your budget and prioritize items that are absolute necessities.

Secret #4:  Reward yourself.

Even those who are planning tight budgets deserve treats for good financial behavior.  These rewards, however, should be financially planned, accounted for, and built into a budget.  It is suggested to not be frivolous or compulsive when it comes to dishing out the dough—instead, consider spending money on something of value to you.  As long as it’s modest, meaningful and won’t disrupt the rules of your budget, this reward won’t make you feel like you’re missing out on the things you enjoy just because you’re living in a financially responsible manner.

Secret #5:  Save, save, save.

If you have the notion that you are on a strict budget and you can’t afford to save…you are making one of the biggest financial mistakes you can make.  No matter how big or small, it’s a good idea to take a set portion of your paycheck each month and put it into a savings or investment account like Betterment that will grow and accumulate interest.  With a savings, you will be able to rest easy knowing that you have the funds to cover an emergency or save for something big in the future—instead of blowing your budget or using a credit card.

Cindy McDonald is a guest post author who writes about proper money management and ways to improve your personal finances.   In addition to her hobby of guest posting, Cindy also covers topics surrounding internet dating for Christian dating sites.  If you want to write for Faith and Finance, check out our write for us page.


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