Sure money is tight and a lot of people and families are now getting serious about creating a budget to help them manage their finances.
A good and organized budget will help you get your finances under control, keeps track of your spending, and makes it possible for you to save up for that new car, a down payment on a new home, vacation, children’s education fund or your retirement.
Once you have created your budget, use these simple but effective strategies to keep everything in place:
What are the reasons for creating your budget?
The reason for creating a budget should always be present in your mind.
It is probably safe to assume that you don’t want to create a budget so strict that it will leave you with absolutely no wiggle room for any kind of entertainment or an occasional pizza party. Your primary goal is to be smart about how and where you spend your hard earned money each month.
However, this may result in you having to cut back on discretionary spending. On the up side, this will help you reach your ultimate goal of being able to do everything that you truly want to do.
If you have a very clear reason of why you created the budget, then it’s easy to live with the discipline that a budget requires.
Keep it Simple
Try keeping your budget as simple as possible.
Your budget must be easy and simple enough to read and understand in order to make it functional and adjustable when necessary. The simpler the budget, the more likely it is that you’ll stick with it.
Keep it Real
Deciding to cut all your expenses at once may be a noble but unattainable goal. So begin by making small but significant changes to how you spend money and try avoiding sweeping, broad changes that may well be unrealistic. Small budget changes are much easier to maintain than big ones, as everything in moderation usually brings the best results. The key after all is not just to write a great budget; the key is to live with it.
Start with short-term goals that you can reach quickly
Quick results are great motivators, as they can make living on a budget a lot easier.
A good idea is to pay off low balance credit cards before you decide to tackle the higher balanced ones. Also, try paying off the credit card that has the highest interest first.
No matter how you decide to pay them off, you will need to have some extra money every month and that can be attained by cutting down on other expenses.
A good plan for paying off your credit cards, while using short-term goals, could look something like this:
- Try paying the minimum payment on every credit card that you have except the one you have decided to pay off first and then every month pay a little bit more in principle for that card. Pretty soon that card will be fully paid.
- Contacting your credit card company and negotiating better rates is also a good strategy. It may come as a surprise to you to see how often credit card companies are willing to adjust the interest payments or rates.
- Get a personal line of credit or a loan and simply pay off all of high interest credit cards. This will save you a lot of money in interest payments.
Set long-term goals
Try putting photographs or posters of your long dreamed vacation and remember that every time you stick to your budget you are one step closer to that goal.
It is very possible to stay within your budget by simply following these strategies, but remember not to revert back to your old spending habits once you have solved your financial problems.
Living on a budget is not always easy. It requires some discipline. And times may come when an emergency forces to deviate from your plan. If that happens get back on track as soon as you can.
Before you know it, all your sacrifice will have been worth it when you realize your financial dreams really are within your reach.
