How to Set a Budget You Can Stick To
Believe it or not, only about 32% of American households have a budget. As crazy as that may seem, multiple sources have reported a similar figure over the past few years. What makes that number even scarier is you know that not every household is able to stick to a budget… so you have to ask, while 32% (a minority!) of households create a budget, how many are actually sticking to it faithfully?
There’s no doubt that creating a budget can be intimidating and even depressing, especially if you have to face some hard truths about your financial status. Unfortunately, creating the budget might be the easiest part! Actually adhering to the guidelines you establish is usually much more difficult than coming up with them. Luckily, there are things you can do to set yourself up for success. Here are some tips to help you set a budget you can actually stick to in the long run!
Face facts, your budget is nothing but garbage if it isn’t based in reality. That means you may have to face hard truths about your financial affairs, which is never fun but is necessary for the financial wellbeing of your family. For example, when creating a budget you must work with just the money you have coming in right now. In other words, you can’t base your budget on the income you might have next year when you maybe get that promotion at work. In addition, don’t obscure your spending. Be (brutally) honest with yourself.
Remember, honesty works both ways. While you shouldn’t lie about the money you have coming in or going out you also need to be honest with yourself about your lifestyle. Think of budgeting like going on a diet; when you start a diet it’s completely unrealistic to think that you’ll never eat sugar of any kind ever again. That’s going to lead to a 3 a.m. binge! Budgets work the same way. For example, don’t totally remove all splurges (like eating out) from your budget… that just isn’t practical. Small indulgences and splurges are perfectly okay!
Haven’t you heard: the devil is in the details. When creating your budget be very specific and detail oriented. Don’t leave any areas up for interpretation. For example, just having a generic category like “entertainment” might be far too vague… would cable TV fall into that category? What about Internet or dining out? Use free printable budget worksheets to help you remember everything that should be included on your budget.
Remember, there’s no “I” in team.
If you’re creating a household budget the whole household has to be on board; it’s a team effort. Obviously, the kiddos don’t need to know you’ve amassed a ton of credit card debt but it is okay to fill them in on your money saving endeavors. Ask them to help make sure lights are turned off or to clip coupons. They’ll enjoy being included.
When it comes to budgeting, it is vital that you and your partner are on the same page. If one of you is saving and the other is spending it’s going to lead to a lot of tension. Have an honest discussion and try to come to an agreement on the expenses you can cut.
Keep your eye on the prize! When first creating a budget, it can be very helpful to set short- and long-term financial goals. These goals could be anything from paying off a credit card to saving for retirement to saving for that dream vacation. Establishing goals and tracking your progress toward achieving them can help make budgeting a little more palatable. Instead of always thinking about what you’re giving up, like that fancy $4 latte, you’ll be thinking about what you’re working for, like a beach vacation complete with umbrella drinks!
Tip: Periodically reassess your goals (both short- and long-term) to make sure they still fit your family.
Hold yourself accountable. Don’t just make a budget and assume you and the fam are staying on track. Re-evaluating on a regular basis will make sure that your budget is working for you. One way is to use a free tool, like this printable budget binder, to keep track of spending month over month.
Tip: Sometimes, when you’re trying to get in physical shape, having a gym partner can make all the difference in the world. Well, budgeting is trying to get you in financial shape, so consider getting an accountability partner. Ask a friend or family member to keep you on track!
Use these tips to create a budget you and your family can actually stick to!