Wanna know the truth?
Budgeting can be kind of scary.
It is asking you take control of your finances. It is asking you to sacrifice something now so that you are better off in the future.
But here is another truth: A good budget does not limit you.
Instead, it sets you up to live freely!
It controls how much you have left over once you put away savings and bills. Of course money isn’t everything in life. However, having more disposable income means you have the freedom to do things that fulfil you.
But this starts with creating a budget you can stick to.
It is not about spending as little as possible. It is definitely not about limiting your family’s lifestyle. Budgeting is about building disposable income in a responsible way.
In this blog post, we cover 4 ways to make a budget you will actually follow.
1) Get very clear about WHY you want a budget
If you are doing it because you think you should, you won’t follow it.
If you are doing it without an end goal, you won’t follow it.
You need a crystal clear reason for following a budget. As well as giving you a mind map, it will give you an answer for when people ask why you aren’t spending more money.
- Why don’t you want to go away for the weekend with us? “Because we are saving for a new car.”
- Why won’t you come out to dinner? “Because we want more disposable income at Christmas this year”
Jen Sincero, the author of You Are A Badass at Making Money, suggests that you get super specific about why you want more money.
Write down exactly what you want your life to look like once you are in control of your finances. What will you do, where will you eat, what will your family be doing?
Write it down and put it where you will see it every day!
Psst! If you like this post, you will also like: Budgeting for a young adult
2) Take your time to plan it
There is no point jumping in without knowing exactly what your plan is!
You will not stick to a budget that has been thrown together and doesn’t match your reality.
Before you finalize your budget, write down everything you spend for a month.
Write down bills, non-negotiables, and every dollar you spend (planned or unplanned).
This way you can see what you would spend in an average month if you didn’t have a budget.
As well as this, write down everything you think of spending. Doing this gives you a clearer picture of:
- What your pitfalls might be
- When you are more likely to spend money
- Where you need to allocate a bit more “splurge” money
- How your mind reacts to spending cues- are you in control of your spending or vice versa?
Once you have a written list in front of you, you can start to categorize and see what gets the chop! If you have no idea where to start, our budget books will give you a starting point (you can check them out here).
3) Remember to include once-off expenses
It is critical to allocate money for expenses that don’t happen every month.
Things like car registrations, water bills, and birthdays obviously don’t happen on a weekly basis!
If you don’t put aside money for expenses like this, then you might completely blow your budget and decide that it doesn’t work.
Do your future self a favour and add a “yearly” category into the budget!
4) Don’t lie to yourself
Be honest with yourself.
Do you really want to cut everything out of your budget? ‘
Is it possible to just not buy makeup and toiletries? Will you really and truly never eat takeout? Is your body going to be happy if you don’t stick to your gym membership?
The Financial Diet says that this is one of the budgeting lies we tell ourselves: that we “don’t need it”.
They suggest that rather than cutting out a certain category, you allocate a set amount for little splurges. Then, if any spending urges do crop up, you are not simply “white-knuckling” your budget and getting miserable.
Having a budget doesn’t have to be scary. It is one of the best ways to take control of your money and start living exactly the way that you want to be living.
So! Write it down, be honest with yourself, and most importantly: breathe!