Everyone, from telemarketing services agents, to CEOs understands that budgeting their money is a good idea. Alas, as with so many other good ideas, actually doing the thing — nevermind doing it properly — tends to be tricky.
What originally began as a clear vision of perfect financial organisation, can quickly degenerate into a half-implemented mess, in the midst of which you find yourself always somehow behind the curve and feeling stressed.
Here are a few easy-to-implement tips to help you stick your budget and make it work.
Accept that it’s a work in progress and adapt as needed
The first thing to understand and accept is that any budget, even the most ornately crafted, is a work in progress. Rather than being a set-in-stone feature of your life, it’s a living system designed to grant you better control over your finances.
All good budgets need the adjustable. It must be possible to adapt them to new, or unexpected circumstances.
For example — if you’ve spent dramatically less than you anticipated in one budget category, but could really use the money in another, don’t be afraid to reallocate the difference.
Budget for the fun stuff as well, not just “serious” expenses
One reason why budgets often fail is that they’re treated exclusively as a serious, business-like endeavour. People budget for things like rent, fuel, bills, and grocery costs.
They often neglect to budget for things like “movie nights”, “takeaway”, or “nights on the town”.
Yet all those fun activities make up an essential part of people’s lives. You’re going to spend money on leisure pursuits sooner or later — and that’s a good thing for your emotional wellbeing.
But if you haven’t budgeted for those specific activities, you’ll find that your “fun spending” causes a disparity in your budget and just makes you feel guilty and anxious.
Avoid this problem by budgeting for fun, too.
Only budget money when it’s in your account
There are different approaches to budgeting, with many people budgeting for months in advance based on their anticipated, or projected income for those coming months.
But what if those happy budgeters suddenly find themselves out of a job or, more optimistically, coming into some extra money? Suddenly the entire budget falls apart and needs a serious re-work.
One of the best ways of avoiding problems like this from occurring is to follow a “zero-based” budgeting strategy. Instead of budgeting money you don’t have, simply wait until some money has entered your account, and then allocate it to different budget categories.
Set aside money for unforeseen charges
One of the biggest budget-killers is straightforward, unforeseen expenses. Maybe you’d set aside just enough money for everything you’d wanted or needed to achieve in a given month, only to have your car break down on you and completely throw your entire plan out the window.
Escape this trap by having a budget category for “unforeseen charges” which you add savings to on a regular basis. That way, your next expensive crisis will simply draw from that category instead of turning your budget completely upside down.