How to Actually Commit to a Budget: 7 Tips for Success
Making a budget generally the easiest part of getting (and keeping) your finances on track. It’s sticking to the budget you created that can be tricky. Remember: the whole point of setting up a budget in the first place is to help you meet financial goals, and like any kind of goal, financial milestones take work and effort to achieve.
The good news is that if you keep some ideas and tips in mind, sticking to your budget can be a little easier than you might think. If you have a history of failed budget-setting or have recently set a new budget for yourself or your household, here are some things to keep in mind.
1. Make sure your budget has a concrete goal
Hopefully, when you started your budget, you went into it with a goal or plan in mind; debt you wanted to pay off, a certain amount of emergency funds you wanted to have in savings, a down payment you were hoping to save for, or a big vacation you were hoping to take in the next year. Whatever it was, it’s important that you have some kind of goal in mind and, more importantly, that it’s a concrete goal. Be specific. Do you want to save $15,000 toward a down payment or $30,000? Do you want to take a vacation to a local national park or to a luxury resort in Fiji? Calculate the amount of money you want to put away, down to the details, and over-estimate.
Furthermore, if your goal is a lofty one — say, one you probably won’t achieve for several years (let’s say you have a lot of debt to pay off, or you’re saving for something big like a down payment for a house) — set milestones for yourself. They’ll act like mini goals and help spur you on. Again, be specific: do you want to save $200 a month or $500 a month? In three months, how much should you have saved? And so on.
What’s the reasoning behind having all the details of your goal ironed out ahead of time even if you might not reach it for years to come? Well, think about it: saving for the sake of saving isn’t really very motivating. On the other hand, if you know what you’re trying to achieve and how much you need to get there, every time you put money away, you’re able to see your progress toward that goal. That’s quite a bit more rewarding than if you’re just haphazardly saving for “a rainy day.”