The first step to saving money is to create a budget and stick to it. This isn’t new advice; it’s proven to work, but many people don’t create one. Many people take the time to create a budget, but then forget it and resume their spending habits. Why is sticking to a budget so hard for so many? The answer for many is that they just don’t know how to. Here are 3 proven tips to help you use the budget you create:
1. Use More Cash
One problem you may be having with sticking to a budget is that it’s all on paper, making it not seem real. It’s almost an intellectual exercise, rather than a real life tool that could save you money. Add to that the increased use of credit cards for common items, like groceries, and you never have to feel the real impact of your spending. Overcome this problem by using more cash to pay for everything. There are some budget items where that’s not possible, and you have to send a check or use an automatic draft, such as paying your renter’s insurance premiums to a national company.
However, use cash to pay for gas, buy groceries and any instance in which you walk into the company or store to pay for services or items. The reality of your finances and the transaction before you sets in when the money leaves your hands. This doesn’t happen with plastic cards.
2. Make a Realistic Budget
It’s not realistic to get accustomed to spending $400 on groceries per month, to in one budget aim for spending $100 per month. You’ll get frustrated in the process and quit your budget. That may be a worthy goal to strive for over a period of time, but not right away. A budget is not stagnant and should be revised quarterly, every 6 months or yearly. How often you revise your budget depends on a change in circumstances, new expenses that you did not foresee and account for in your previous budget and success you’ve made with saving money in different areas.
3. Get on the Same Page with Your Spouse
Financial problems are the leading cause of divorce, and not sticking to a budget plays a role. Usually, one spouse is more dedicated to keeping the budget than the other. This results in someone overspending and thwarting any efforts to save money. The underlying problems have little to do with money when couples can’t stick to the budget they’ve created together, but not keeping the budget exposes them. One solution to try if you’re having this problem with your spouse, as far as the actual budget is concerned, is to get on the same page. Discuss with one another the vision you have for your family and how saving money will help you get there. Agree on the total amounts on each budget item, taking into account each other’s concerns and struggles.
Make copies of the budget you create and post them in your home office or work area and kitchen, and also put one in your car. Hold yourself accountable by keeping accurate records of what you’re spending, and keeping track of how you’re saving money. Budgeting software can make this task easy.