One of the biggest problems that most people have with cash, isn’t that they’re reckless, it’s that they don’t know how to realistically divide their money each month. We think that we’ve considered every possible expense that might come our way, but then we discover that there are more unexpected costs lurking in the background.
If you’ve struggled to make your budget work up until now, the problem might be with the fact that you’re not being realistic enough. Today, we’re going to talk you through some strategies for ensuring that you can stick by your future money plans.
1. Review Your Spending
The first step towards realistic spending is getting real with yourself. Reviewing your spending habits will make it easier to examine exactly how much you’re really spending on everything from food to drive-through coffee. Go through all of your expenses from the last month, including the money you’ve spent on things like newspapers and café sandwiches, and figure out what your actual outgoing expenses look like.
Although it might be uncomfortable at first to see that you haven’t been as careful with your money as you thought, it’s important to be honest with yourself. The more realistic you are about your problem areas, the easier it will be to overcome them.
2. Decide on a Realistic Plan
Once you’ve looked at all of the information carefully, you can attempt to design a budget that makes sense to you. This should outline exactly how much cash you have to spend on things like food, household bills, and so on. Don’t forget to think about the irregular expenses that pop up from time to time too, such as your car tax or a water bill.
Some people make the mistake of thinking that they’ll get the best results if they cut out all luxury spending completely and focus on savings. Unfortunately, this rarely works as well as you’d think. You’ll need to give yourself at least a little leeway for fun, or you’ll end up making mistakes somewhere down the line.
3. Be Ready to Make Adjustments
Like it or not, life changes. Sometimes it’s for the better. You might start earning more cash at work or reduce your bills by switching to a different energy provider. You may decide that you need to take out a loan via somewhere like Omacl for something important right now, which means that you need to account for the regular repayments and interest fees going forward.
When something in your life changes and it affects your finances, the first thing you need to do is take a step back and look at your budget. Decide if something needs to change and be ready to adjust again if your first plan doesn’t work as well as you thought. If you’re new to this, you’re bound to make a couple of mistakes at first.
4. Have a Misc Category
Most of the time, when people make a budget, they create categories for various expenses. You might have a category of your budget dedicated to the costs of food for your entire household, and another part that’s committed to saving for clothing and haircuts. However, even if you’ve taken the extra time to think about all those irregular semi-annual expenses, there’s a good chance you’ve forgotten about something.
When a child’s birthday or an anniversary arrives, it’s easy to realise that you forget all about planning for the event. Unfortunately, since you’ve budgeted everything down to the last penny, you can’t always find the cash you need. A “misc” category for your money will ensure you’re prepared for almost anything.
5. Give Yourself a Break
Finally, remember that no matter how carefully you plan, and how stringently you try to follow your budget, there’s always a chance that you’re going to make a mistake. It usually takes around three or four months before someone get’s the hang of a good budget. Make sure that you’re kind to yourself and patient too. There may be moments when you end up using a bit of your savings, or some cash you had saved up for something else – and that’s ok.
The important thing to remember is that you need to keep pushing yourself to improve. Learn from your little mistakes, adjust your budget, and start again. It’s up to you to decide that you’re going to be in control of your budget. Keep focusing on what you want to accomplish, and give yourself some forgiveness for the areas where you go wrong.