Well done for creating your weekly, biweekly or monthly budget. Now that you know what’s coming in, what’s going out, have your direct debits and/or standing orders all in place and know exactly what you’re going to be spending cash on; comes the hard part, actually sticking to your budget. So let’s get cracking with 7 tips you can start today to help you succeed with budgeting.
So the saying goes that you can’t really progress successfully into your future without understanding the past. I believe this, to be true. Identify the challenges you face with sticking to a monthly budget. Is it?:
Your budget challenge may not be on the list, and that’s fine-it really is a personal thing, so there is no right or wrong answer. The most important thing here is for you to Identify your common stumbling block.
Mine was ‘emotional and impulse spending’ when I felt stressed- Or felt like I didn’t have enough money. I would then go and spend it all to make me feel like I did have money, and then hate myself for it weeks later.
“Don’t assimilate happiness with spending. It won’t be long until you have nothing to spend
— Boss Of My Money, Says So!
Write down your goals for budgeting, why do you want to take control of your finances, why do you want to pay off debts, why do you want to save, what goals do you have for your children, what will investing help you achieve, where do you want to be in 2,3,5,10,15 years from today. Do you have plans to retire early or do you have a legacy you want to leave for your family or the world? There has to be a connection between your goals and your budget, others wise, when the going gets tough, you will throw in the towel and fall flat on your face. This is where you create your own definition of what being Boss Of My money’ means to you.
If you don’t like using apps for budgeting change it, try excel, envelope system, pen and paper, 20/30/50 method, 20/80 method. I prefer using the 30/70 method, or even create your own way of budgeting. Whichever method you choose it has to be right for you. Anything complicated will not motivate you to go back to the tool you have created. It has to be an easy system to use and one that doesn’t cost a fortune. I found loads of budgeting apps in the beginning -YNAB, every dollar, Expense IQ, Money manager desktop etc. I found some to be very restrictive because the tool was designed for the USA market. Some worked better by linking your bank account- which is only being introduced to the UK market recently, so not many choices out there. I signed up for the free trial for YNAB but decided to cancel it as I could not justify being broke and spending $83.99 on a budgeting app. I enjoyed using every Dollar app for a while but seeing the $ symbol irritated me for some time. But if I were able to get over the $ symbol- I would definitely use this app again. After trying a few- I resolved to a hardcover A4 book, using a two-page spread, pencil, ruler and highlight pens to create my monthly budget. Now I use my own Boss Of My Money (BOMM) no-nonsense Monthly budgeting sheet. (If you sign up to our monthly mailing list newsletter- I can send this to you to download for free as a PDF).
“If you can’t find a budgeting method that works for you, create your own and do whatever it takes
— Boss Of My Money, Says So!
Sometimes we can be overzealous and over-budget to save £500 every month, while under-budgeting on our gas and electricity or mobile phone bill. This can be frustrating after a while because as much as you get excited transferring £500 into your savings account- you’re only going to have to move some of that money back to your current account to cover your bills. Set yourself realistic goals and be true to yourself. Remember it’s baby steps. Saving £1 every week will make you £52 better off by the end of the year, than trying to save £20 every month and end up spending it all. Additionally having a realistic budget will also make room to treat yourself every now and then.
How you feel and think about money is what you will become. It really is that simple. Fill your mind with positivity. Read books about managing personal finances, talk to people who are managing their finances well and ask for tips. In this day and age access to information is not our problem- it’s implementing what we learn. Listen to podcasts about managing finances, YouTube videos, listen to audiobooks every day about managing personal finances and at a minimum take 3 things from what you have learned and implement immediately.
If you haven’t already ready ‘Go public- break the silence’ blog. There I share how I came clean to my friends and family about struggling to manage my finances. If becoming debt free, havings savings, living below your means but within your needs and securing your future is important to you, having cheerleaders and people that will call you out and discourage you from spending is what will make you win in this race. Stay away from spendaholic friends. Don’t engage in conversations about spending, holidays and clothes if they are things you are struggling with.
Reviewing your budget regularly will help you stay on track, identify pitfalls and catch overspending quicker. Have a system in place for how you will go back and review your budget. Will this be each time an item of expenditure takes place or a bill is paid? Will you do this every day, twice a week or once a week? Have you set a reminder on your phone or calendar as to when this will be? Have you checked in with your partner and agree a mutually convenient time to review your budget. If you manage the finances, decide on how regularly you will update the other spouse. Periodically reviewing your budget will also help you create a realistic budget that you can actually stick to.
This is way too close to home for me. When your income doesn’t cover all your priority expenses, you have a few options: do overtime in your current job, get a second job, sell stuff- your car, clothes, furniture you don’t need, start a side hustle such as DIY, gardening, babysitting for family, friends and co-workers. Use your skills and expertise and start charging for it. You may even have to consider downsizing while paying off debts and reducing your expenses by negotiating with your service providers, switching to cheaper services, cancelling subscriptions such as gym, movies or magazines to prioritise your needs over your wants. The truth is you will have to make temporary and painful sacrifices to achieve your goals. For me, my most significant sacrifice was not being able to help and give to others- but I have realised that I first need to get my house in order. Before I can be true to others, I first have to be true to myself. Happy Budgeting!