You know that budgets are important, and you may have already created a personal budget spreadsheet, but the true test is if you can stick to your own budget. The most challenging part of the budgeting process is holding yourself accountable. Luckily, there are many easy ways to help yourself maintain your budget and reach your financial goals. Here are five secrets to sticking to any budget you create.
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If you find that the miscellaneous portion of your expenses seems to mysteriously increase each month, it will help to keep a closer eye on each transaction. By saving your receipts and breaking down your expenses even further, it will help you determine exactly where those dollars are going. Is it your daily coffee run? Or maybe those lottery scratch tickets you buy every time you stop for gas. Whatever the culprit, saving the receipts will help you narrow down exactly what miscellaneous expense is causing the most trouble.
The golden rule is to pay yourself first, typically it is recommended that you allocate 20% of your monthly earnings to savings. Many people make the mistake of only contributing to their savings at the end of the month when they see how much money they have left over. However, if you automatically put money into savings immediately after each paycheck, you’ll end up saving much more in the long run. Many financial institutions have the option for you to automatically move money to savings accounts at the same time each month. This way the money isn’t sitting in your checking account, easily spendable every time you’re out and about.
When creating your budget for the month, make sure you leave room to spend money on your wants – not just your needs. Just like a strict diet, you’re more likely to binge unhealthily if you don’t practice moderation. By giving yourself spending money each month, you are allowing yourself more freedom and the ability to enjoy your money in a healthy way.
If your credit union or bank has a mobile banking app, download it! The app gives you the ability to check the balance of your account daily. Checking your accounts regularly helps keep you on track with spending and sticking to your budget. It also helps you identify red flags, such as credit card fraud, as quick as possible.
Your personal budget should keep evolving over time to match your current financial goals and limitations. Creating a budget is not a once and done deal. At the end of each month, look over your budget and see if you need to rearrange any numbers. You may start contributing more to a retirement fund when you cancel your cable, or your electric bill increases in the winter so you plan on spending less money on clothes. Whatever the exact situation may be, give yourself the time to analyze and adjust your budget to what works best for you.
Sticking to your personal budget doesn’t have to be difficult. Make budget maintenance simple by following these five secrets to success!
Looking to take your personal finances to the next level? AmeriChoice offers free personal financial analysis consultations to provide expert advice on how to reach your financial goals.
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