“I’ve had a budget before and it doesn’t work”, ‘I haven’t got enough time to be worrying about a budget”. Yes OK we’ve heard it all before, but the point is, you have money so you need a budget. Maybe it’s not worked in the past because you haven’t had the correct S.U.P.P.O.R.T.
Sensible - Make sure you are realistic with your budget and don’t lie. If you spend $200 a week on alcohol, or shoes or both put it in the budget. If you can afford to spend that amount of money we are not going to tell you not to, we just want to make sure you can budget for everything else to fund your hobbies.
Uncomplicated – A saying I have always remembered from my University life when doing anything is ‘KISS’ – Keep It Simple Stupid. Overcomplicating things is not fun or motivating. We all hate not knowing where our money is actually going and whether we have enough funds each month. Keeping it simple will keep you more inclined to stick with it if you can easily spot incomes, outgoings and potential pitfalls.
Period – you aren’t going to see results overnight and you may start to see some improvements over a few weeks. But give it a period of time. Sticking with it and seeing the long term achievement will benefit you in the long run. After a year you can look back and reflect on how you have done with a budget compared to the year before with no budget – I bet you’ll see the difference then.
Purpose – what do you want to achieve? Set yourself goals, when you can see you are getting closer to reaching your goals you will be more inspired to stay on track. Whether it’s a small goal to keep you motivated along the way or a big goal of where you want to get to, aim and reach for them.
Open – Be open about your budget, write it down, and put pictures up of your goals. Having constant reminders of your budget and goals will help you stick to it when times are getting tough or impulses purchases are tempting you. Keep a picture of your dream house in your wallet and when you go to reach for the credit card you’ll remember your goal and maybe think twice.
Rigidity – make sure there’s room for flexibility in the budget and there’s room to move money and expenses around. Overestimate the expenses and underestimate the income. When you see you are not maxing out your budget it will keep you motivated to stick with it as you can see from the results it is paying off.
Track – Know where you are with your budget. Once it’s been set you need to track how you are going along the way. You need to make sure your review you’re spending so you don’t fall into the trap of bank fees and overspending and only realising when it’s too late.
We can provide you with the correct ‘Support’ at Prudent Cashflow Mentors, call or email us today and we can help and support you through the budgeting process.