It’s one thing to come up with a budget but sticking to it is another. Keeping a budget is like keeping to a diet, it sucks, it is a nuisance and a pain. However, it’s a necessary evil that we have to put up with. It’s only through that budget of yours that you can effectively save money and have a secured financial future. It is very important for you to understand that budgeting is not a torture mechanism to save money. Rather, it’s a powerful tool that will enable you to gain financial control so that you can fulfill your dreams. We at the Money Academy have come up with 9 little tricks that will help you stay on track and not give up budgeting.
1. Have a realistic budget
Are you regularly breaking the limit of your budget? Take some time to review it. It might be that you have not taken into account those small emergencies or important expenditures. Maybe you did not go into enough detail when you set your budget. It’s difficult to predict how much money you’ll need in every category of life, a new job may necessitate a wardrobe change and your clothing budget just isn’t enough to accommodate that. If your budget isn’t working then tweak it. It’s your budget after all; just remember to keep your long-term financial goals in the picture.
2. Remember the big picture
The point of the budget is to keep you out of overwhelming debt, help you save and build a bright financial future that will give you more freedom, not less. Always think about how you want your future to be. If you are budgeting to help you save for that cool plasma T.V, think of how cool your future would be with that T.V and sticking to your budget will help you get there.
3. Strategize
Set up separate savings, checking accounts or piggy banks for specific urgent expenses, and then leave that money alone until the intended purpose is valid. Set aside money for
• Home repair issues or save for replacing appliances
• Major vehicle repairs
• Medical emergencies
• Special occasions like birthdays and anniversaries
Contribute what you can to these accounts every month, even if your budget only allows for 500 Shillings. These funds should be separate from the savings those major goals.
Such accounts could enable you to manage those immediate financial emergencies without conflicting with your usual monthly budget. When temptations arise to use the money for any other reason other than for the intended emergency, just repeat this mantra: “That money does not exist”
4. Stop window shopping
If you do not know it is there, you will not feel bad about not having it. Although you can save a lot of money buying used or clearance items, you are not doing yourself a favor if you are spending your electricity money on clothes at Gikomba. Window shopping is one of the easiest ways to break your budget.
5. Carry a specific amount of cash when shopping
Take a specific amount of cash for grocery shopping and leave your debit and credit cards at home. That will force you to stay within your food budget and avoid impulse purchases. There’s something powerful about handing over a stack of a thousand shillings notes for a purchase; it causes you to really think about the amount of money you’re about to spend. Swiping a debit card, on the other hand doesn’t feel nearly as “real”. Cash teaches you the power of self regulation. Try using cash exclusively for your personal spending and when your cash is gone you’ll have to wait until your next budget cycle begins.
6. Change your spending attitude
Make it more difficult on yourself to make impulse purchases. Set up barriers so you have to really work for it. Availability is your enemy; either cancel those credit cards or stop carrying them. Carry a reasonable amount of cash with you so that you won’t get tempted to buy those shoes being sold along Kimathi street in the evening.
Changing your attitude about what you think you must have. Rethink your spending lifestyle, and make cuts where you can:
• Take your lunch to work instead of eating out.
• Eat simple foods prepared at home
7. Set up visual remainders
Just like couples put photos of each other in their wallets or purses, keep your budget in your wallet or purse. By bringing it with you everywhere you go, you constantly remind yourself of its importance. This also serves as a great reality checker. Imagine opening your purse to chuck out some cash for an impulse purchase and you stumble upon your budget list. A spoiler isn’t it?
8. Find some support
If you feel like you’re the only one in your group of friends who is on a budget, do a little looking for a like minded group. You need to know you are not the only person setting financial limits for yourself. You can also get an accountability partner who would check on if you are keeping to your budget.
9. Educate yourself
Learn all you can about finances and how you can best invest in yourself instead of taking the more common road of instant gratification, overspending and endless debt. There’s no better place to learn about managing your finances than here at the Money Academy. The more you learn about how to manage your money, and the resulting rewards of doing so wisely, the better you will be at not only creating a budget that works for you but also sticking to it.