In my last article, we focused on How to setup our monthly Budget. We also checked the step by step guide into creating one of the most effective and robust budget creation. Today we shall look into one of the important aspect in sticking to the budget. We shall be checking 10 Best Tips for sticking to your budget. So lets begin.
- Automate Savings
To begin with, this is a very important way to control your spendings. Setup automatic transfers of your money from salary account to your savings account. You can also open a Recurring Saving Account and pledge to save 5% to 10% of your earnings into this Recurring Account every month. This will help you to save money and also help you to avoid spending on non-essential things for the household. If you follow this tip in a very determined way, the biggest benefit of Automate Savings is that it helps you to reach your Short Term Goals as well as Long Term Goals very easily.
2. Use Cash Envelopes
This tip can be utilized for your discretionary spending category. You can withdraw the budgeted amount in cash and use it for your discretionary expenses for the month. Once the envelopes is empty, you cannot spend more in that category for that month. This tip is a beautiful way to control and keep a check on your expenses.
3. Limit Credit Card Use
This Tip is one of the most important Tip to control your impulsive buying. Try to use Credit Card only for budget expenses only. Don’t get into the trap of paying the spend amount at a distant date (Credit Period). Using Credit Card in an unplanned way can blow-up your persistent and disciplined Budget for a toss. Use your Credit Card very responsibly.
If you are trapped in Credit Card Debt, then read my article on How to Pay Off Credit Card Debt – www.allbizintel.com . In this article I have discussed in detail on how to repay your Credit Card Debt in a systematic way.
4. Cut Unnecessary Subscriptions
This tip is an on-going process. You have to review your subscriptions regularly every month. You need to cancel those subscriptions which you do not use or cancel those subscriptions which do not add value to your life. For example:
Check Streaming services which are not viewed by you or your family members. Gym Membership needs to reviewed if you do not hit the Gym as per your monthly membership plan.
Same goes for other subscriptions which needs to reviewed by you every month.
5. Plan for Irregular Expenses
These expenses are the expenses which do not occur every month. You need to set aside some money for these expenses such as Car maintenance, sudden medical bills, Gifts for certain occasions. Also, this fund can help you in meeting sudden unforeseen expenses. Thus, this will help you in avoiding any unbalance in the monthly budget.
6. Involve Your Family
If you have a family then involve them in the making of the Budget. Include their suggestions and ideas. Make them participate in the budget and make them aware of the importance of the allocated amount for their expenses. Inform them about the fund allocated for a particular expense for the month and if they spend the allocated amount, before the month ends then they wont be getting any additional money for it. Discipline in spending the money is of utmost importance here by every family member. Ensure everyone in the family is on the same page and contributes towards the meeting of the financial goals.
7. Reward Yourself
Set small rewards for yourself or for any family members who stick to the allocated budget. This can be a very small treat like Ice-cream or any sweet dish. This can be any activity you or your family member enjoy doing. This tip will help you to be motivated and keep on going in achieving your financial goals.
8. Emergency Funds
Do not mis-understand this funds with Irregular expenses. Both are different. Irregular funds are smaller in size and their need is also smaller in nature. Whereas, Emergency funds are amount-wise larger in size. You need to have Emergency funds for at least 3 to 6 months worth of expenses. This provides a financial cushion in case of unexpected circumstances such as loosing a job or if the company you are working with becomes Bankrupt or closes down due to unforeseen situations. In such scenarios, till the time you find another job or alternative way of earning, this fund will help you in meeting your household needs.
9. Stay Flexible
One of the important tip is to stay flexible and willing to adjust to your budget. Life keeps changing constantly. Change is the only permanent thing in this world. There can be situations such as changing to a new job or moving to a new place/city. You need to adjust your budget, if there is a new family member in the family. This can change the dynamics of your monthly budget. Hence you need to be ready for such situations and plan accordingly.
10. Review and Adjust Regularly
Last but not the least, is reviewing your budget on regular intervals. It helps in Identifying the problem areas. Analyse the problem in detail and take necessary action. Accordingly, make appropriate adjustments in the budget. Schedule a monthly review to assess your budget’s financial goals.
Conclusion
By following these 10 tips, you can create a realistic budget that helps you manage your money effectively and helps you to reach your financial goals. Regular monitoring and adjustments are key to sticking to your budget and achieving financial freedom.