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I'm able to sit down and put together a budget. My problem is following it. After about a month of being strict, I lose sight of things, and get off the budget. It's then a couple of months later and I realize I need to get back onto a budget and the cycle repeats.

What are some tips and ideas that I can implement to continue to follow my budget after I've made it?

10 Answers 10

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It's simple, really: Practice.

Fiscal responsibility is not a trick you can learn look up on Google, or a service you can buy from your accountant. Being responsible with your money is a skill that is learned over a lifetime. The only way to get better at it is to practice, and not get discouraged when you make mistakes.

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Do a monthly budget, unique to each month, before the month begins, spend all of your money on paper.

Use envelopes to help you keep track of how much you have left for things you buy throughout the month. Have separate envelopes for things like groceries, restaurants, clothing, entertainment. Put the amount of money for each category in cash in the envelope. Only spend the money out of the correct envelope and don't mix and mingle between envelopes.

Pay in cash, with real money. Don't use credit or debit cards, it's proven you spend more when you are not paying with cash.

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    I completely agree with this answer except for your last sentence. It has not been proven that people spend more with credit cards than with cash, as this discussion describes. The studies that have purportedly found this use only small amounts that don't scale well to realistic budgets. – John Bensin Apr 4 '13 at 12:55
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Switch to cash for a few months. No debit. No credit.

This will help for two reasons:

  1. You probably use cards for everything, so you'll be pretty broke and unable to spend alot of money, since you paying bills from 30 days ago AND spending money in current (cash) dollars.
  2. Psychologically, spending actual cash is an activity that is interpreted as pain by your brain, and you will naturally try to avoid spending it.

Once you've broken the bad habits, you should be able to go back to cards for the convenience factor.

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To me, this question is really about setting and meeting goals. The process is the same, whether it's about exercising regularly, or saving, or whatever. You need to have clear, personally-relevant reasons for doing something.

Write down:

  1. Exactly why you want to save. It may seem trivial, but if you can't visualize the prize it's hard to stay motivated.

  2. How much can you afford to save? Use something like Mint.com to find out your real monthly expenses, as opposed to what you think you're spending. Also, don't get overzealous... leave yourself some money for small luxuries and unexpected expenses so you don't feel like a miser. Saving should be a joy, not torture.

  3. Automate the saving process. Set up an automatic transfer to move the amount you figured out in step 2 to your savings account on the same date you get paid. This is very important. By saving early you ensure there will be enough money to save. If you wait until the end of the month, there will usually not be anything left.

  4. Don't you dare touch your savings! (Except in a real emergency) If you must dip into your savings, immediately create a plan to put it back as soon as possible.

Also, get into the habit of reading personal finance books, blogs, sites, etc. I recommend authors like Robert Kiyosaki, and Suze Orman.

Good luck!

  • +1 for the automated saving process. You're not going to spend what you don't have available. Getting used to live poorly is better than being poor. If you save, you can always buy yourself a treat every once in a while (say a romantic weekend once per trimester). – GUI Junkie Jan 8 '11 at 16:26
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Try a tool like mint.com that will send you text messages regarding how you budget is going. If you use mint, set up your budget to send you reminders before you hit your budget. Example: if my budget for dining out is $100, I tell mint.com it is $50 and I get nagging text messages after $50 to remind me to keep a lid on my spending.

  • Seems like there's an opportunity to have a tool alert you more aggressively without having to hack in your own early warning system. – Larsenal Jul 10 '14 at 14:25
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Assuming what is taking you over budget are not essential costs such as fuel bills, food, mortgage etc. you could do the following. Work out your monthly disposable income after all essential base costs have been sutracted. Then simply keep a book of any additional spending.

It will be very easy to see if you're at risk of overspending. In fact, even when one has no need to budget it's still an excellent idea to keep a book of all your spending. It's surprising how useful it can be. It's a great reference for dues dates, sizes of past bills and provides an excellent cross check of your bank statement.

It's not often that you find an error on your bank statement (at least it shouldn't be!), but my books have helped me locate three such errors over the past 25 years, which I'm sure would have gone unnoticed by most people.

So my advice is, keep a book of your spending.

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  1. Have a spreadsheet (excel, google) that lists your expenses and income, and how much money you are supposed to have left by the end of the month. Have categories like "mandatory spending" - mortgage/rent, utilities, "variable spending" - groceries, clothing, gas, etc., "savings", "free income". If you see that your free income is less than what you spend on items not in first two categories - cut the spending until it fits and keep it there.
  2. Register your credit card accounts with mint.com (or alike site you trust) and use budgets feature to track your specific categories (groceries, movies, books, etc.) and use the stats provided by it to track categories over time. If you are not inclined to trust such sites, download your transactions to a spreadsheet and do the same manually. Find out which categories routinely get you over budget and think why - is your budget too small? Do you shop impulsively? If so, you should leave credit card at home and just take enough cash to buy whatever is necessary.
  3. When going shopping, make a list beforehand and buy only the stuff on the list.
  4. Make automatic savings to buy anything over preset small amount (like anything over $200 or depending on what your income level is) - and buy only after your savings account has it, but not before. Avoid credit for all but most expensive things (like car), if you use credit cards - always pay them off monthly, if you find you can't do it - use only debit cards or cash.
  5. Follow "day of wait for every $100 of price" policy - i.e. if you want to buy something costing $200, wait for 2 days (you can wait more of course, but never less), consider alternatives, research the prices, think if you still need it or maybe you want to spend this money otherwise, etc. Higher the price, more you wait. Of course, then number should change according to your budget - $100 is just an example. And if we talk about buying something big, like a car, you don't have to be exact - but you should have a longer wait still.

And remember, there's nobody but you that can do it - so the most important tool here is your determination and persistence.

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Plan all your needs and put priority based on need & urgency.

New Habit:

Rethink. Rethink. Rethink. whenever your going to buy something. rethink before going to buy. remember what is your priority one than that and will this affect on your plans. if that affect, than dont buy.

Lets leave it to that habit, that will take care of your budget yar.............

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Give all your money as well as your budget requirements to someone you really trust. Tell them to give you ONLY what your budget allows. As long as both of you take this seriously, this method will be very effective.

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    Insufficient reputation to vote this down. Original question is tagged "self-control". Following your advice runs contrary to the stated intent--namely, finding a system or gimmick to help stick to a budget. – qualidafial Feb 4 '11 at 6:37
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Lazy man's budget. Four separate accounts for timing of expenses: short (monthly; utilities etc.), medium (quarterly+; property taxes), long (yearly+; house improvements) and retirement.

Set target levels for each account, to cover 1 full cycle. The short target is smallest; it should comfortably cover a month. For me each target is about 10x larger than the last. (Cycles & targets for a homeowner w/ family; YMMV).

All income goes in short term. When an account gets above target level, the excess gets swept up to the next longer term account. That's all I keep firm track of; takes just a few minutes a month.

Watching the account balances vs. their targets (and how short some of them are of target) keeps me focused on spending, and thinking about how much I can sweep (or can't) next paycheck.

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