“It’s clearly a budget. It’s got a lot of numbers in it.” – George W Bush
Formulating a budget is one thing, sticking to it is another. It’s no secret that having a budget will help you effectively manage your money. The unfortunate reality is that most people fail to stick to their budgets. No matter how often they adjust it to accommodate their various expenses, they somehow end up over spending. How can you put a stop to this?
Miriam Caldwell, a freelance writer with a specialty in personal finance, has identified a couple of ways through which you can identify your budget weaknesses. I’ll share them with you.
Begin by looking at your budget for the past few months and identify the areas where you are constantly overspending or transferring money into each month. These are usually the problematic areas in your budget.
Some of these problematic areas include:
- Groceries
- Entertainment
- Allowances
- Clothing
- Eating out
Based on your personal interests, you’ll definitely spend on areas you like the most.
Next you need to consider how much you can truly spend on your problem categories. Miriam states that its okey to have a particular area where spend a bit more on, as long as you are staying on truck with your financial goals plus following the rest of the categories in your budget.
Start by allocating a bit more on these problematic areas but make sure you also adequately allocate to the other categories of your budget. You then gradually start cutting down on expenses where possible.
Sometimes these problematic areas come about because you didn’t adequately budget for. This is very common in the grocery category. Food prices constantly fluctuate and what was adequate for last month might not be enough for this month. You can look at your spending on groceries for the last 12 months, identify the highest amount you ever spent and allocate that amount to your budget. This will constantly have your budget ready for any high expenses. You’ll probably find that you’ll be spending less than what you allocated, meaning you’ll always have money left at the end of the month. Be smart about, save the balance left for a rainy day.
At times we fail to stick to our budget since we have spending issues. There’s no way around this. You’ll simply have to change your lifestyle. Whatever you earn supports a certain lifestyle, living beyond that lifestyle will mean that you are leaving beyond your means. This is a sacrifice you have to make.
Identifying the leaks in your budget and working to fix them will give you solid control over your financial future.