When you create a budget, you're designing a map meant to guide you in deciding what things you need to allocate money to each month. Sometimes you may find it difficult to adhere to a budget, which is an indicator that either the budget wasn't realistic, or that you need to cut back expenses or make more money. The trick to sticking with a budget is to make it an emotional investment, which will help you to commit to your financial plans.
Track your spending for at least a week. Each time you spend money, even if it's just a few cents, make a note of it. At the end of the week, look at what items you're spending the most money on. How much did you spend on eating out? How many impulse purchases did you make? Look most closely at where your money is leaking out; these are the easiest places to reroute money to things that really need it, like savings or debt.
Align your income with your spending. Your week-long tracking list is a good projection tool for how much you're spending in a month. Add that to bills, credit card payments and any other recurring payments to total the amount of money that leaves your bank account each month. Look at what you're left with at the end of the month to determine if you have enough left to feel comfortable or if you need to cut back or bring in more.
Budget in your savings goals. You should budget at least 10 percent of each paycheck to your savings. If you don't incorporate savings into your budget, you're more likely to gloss over it each month. You should also budget to pay as much as possible to one credit card, while paying minimums on your other cards, to begin paying off debt completely. Some financial experts recommend paying the smallest balance first as motivation to continue paying the cards off; others recommend paying off the card with the highest interest first to avoid the costly long-term effects of interest. Whatever method you choose, make sure you stick with it and incorporate it into your budget so that it's a priority and doesn't feel optional.
Once you've created your budget, take it for a test drive for a month. Track your spending using budgeting software or by creating your own spreadsheet. If you find that it's impossible to adhere to one part of your budget, adjust it as necessary. Your budget must realistically fit into your life or else it's like throwing yourself into a fad diet that you can't maintain forever. A budget is a lifestyle change, not a quick fix, so you need to make sure you can continue with it for the long haul.
Find other ways to do the things you enjoy without spending as much money. Consider renting movies instead of buying DVDs; make gifts; visit the library; cook at home more; exercise outdoors. If you believe your budget is keeping you from having fun, there's no way you'll stick with it. By thinking of it as a challenge instead, you're more likely to begin enjoying your money saving tactics, and you'll be encouraged by the growth in your finances.
- Jupiterimages/BananaStock/Getty Images