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“Someone’s sitting in the shade today because someone planted a tree a long time ago.” – Warren Buffet
A common myth about rich people is that many of them earn ludicrous amounts of money. While that may be true at times, it’s not always the case. As a self-made millionaire, I can assure you that I didn’t get paid that much cash at the start. I even know of bus drivers and janitors who’ve become millionaires. In short, you don’t need to profit in millions to make a lot of money.
Now, you might ask how anyone can make that much money, even if they earn minimum wage. The secret trick is budgeting. Learning how to control and manage your finances is crucial. When you can stick to a budget, you can learn how to temper your spending habits. You can also see how much money you save, as long as you play your cards right.
The biggest you can make is not knowing or understanding what a budget is. Many people think they know how to budget, only to be shocked then their money runs out. So, the first step is to understand what a budget is.
Simply put, budgets are money plans that help you see how much you’ll gain or lose. It relies on two important factors: your income and your expenses. Budgeting can happen in any context, from buying a meal to paying off a mortgage. What matters is that you remember the numbers. Ideally, a good budget should help you spend what you need without losing too much cash. The last thing you want is to waste money or short-change your needs.
If you don’t know how to stick to a budget, it might be from your approach. Many people think that budgets are long, comprehensive lists that cover every single detail. Some might even go as far as having textbook-like planners for all transactions. However, not all budgets need to be complicated or specific. Sometimes, putting a limit on your spending can be more than enough.
For example, you can set $100 as your weekly grocery limit. That means in one week, all the stuff you buy at the supermarket should cost up to a maximum of $100. Another budgeting method is the 50/30/20 rule. In this method, you focus 50% of your monthly income on your needs, 30% on what you want, and 20% on investments. These include savings, stock shares, and student loans.
Now that you know how budgets work, it’s time to dissect exactly why you struggle with them. Knowing how to stick to a budget also means knowing what’s holding you back. That way, you can reframe your mindset and make a better, more effective plan.
Firstly, the main reason that you don’t know how to stick to a budget is its practicality. You might get your salary and hope to save 50% of it by next month. In your mind, using only half of your income will help you build your savings and still provide for your life. However, it’s more likely that you’ll be spending a good amount of your income.
The problem is that you’re trying to force an ideal number as your benchmark for saving. Real life doesn’t mean surviving only a dollar a day. It also doesn’t mean you have to spend your days living from paycheck to paycheck. The most important thing to do is make your budget fit your situation. If it fits the life you have, it’ll make a lot more sense.
For example, imagine if a stay-at-home dad and a college graduate compare budgets. The stay-at-home dad might have children to care for and house bills to cover. Meanwhile, a college graduate might be more concerned with exploring other studies or buying an apartment. In either case, you can see that their money problems would differ. You can’t expect them to try and save or spend the same amount of money. To have a successful budget, you need to see what they need and how much they can afford. Once you know what their lifestyles and concerns are, then you can start to build a budget that they can follow.
Another reason why you don’t know how to stick to a budget is a lack of self-control. You might complain that money is only good for spending or for helping you live in the moment. However, look back at Warren Buffett’s quote at the beginning of this article. Your money is like a tree; give it enough time to grow and you’ll be able to live comfortably in the future.
Here’s another way of looking at things. Instead of complaining that budgets take away your fun, look at the goals you have in your life. Do you want to live in your own house or apartment? Do you want to get married at some point and have kids? Do you want to travel the world someday, whether for work or during retirement?
If so, why are you spending money now if you can build up to that goal? Treat your money like they are an investment, not a plaything. That way, you can see their value in the long run, not just at the moment.
Let’s say that you do keep to a realistic budget. Let’s also imagine that you know how to stop your impulsive buys. Do you still not know how to stick to a budget? If so, then it could be from the plan or method you use. Some people try so hard to cover every single detail that a budget is almost impossible to follow. While a budget can help you manage your money, it shouldn’t be so tight that you feel stuck.
For example, think of your grocery list and the things that you’ll buy for the week. What would you do if one of those items cost an extra dollar? Will that ruin your budget plans? Some people might say yes. They may even complain that it’s completely messed up their finances. However, a complicated budget system shouldn’t be strict.
Also, a budget isn’t a guarantee that you have covered every single expense you face. Ideally, you would like to foresee what you spend. However, there are times when life and luck force your hand. Case in point, think of a medical emergency or a car accident. It can happen to anyone and it can leave a hefty bill on your doorstep.
If you want to protect your budget, don’t try and plan every cost you face. Instead, consider what your limit is and save the rest. It’s better to have some cash left over than to use all dollars in a purchase.
You’ve learned what a budget is and what could be holding you back. Now, you’re ready to learn how to stick to a budget. With these four tips, you can discover how to make your budget kickstart your savings. Follow them carefully and you’ll see your bank account grow stronger than ever.
Firstly, you need to do a close inspection of all the budgets you’ve set. The best way to update your budget is to find the weak spots in your game. Consider which expenses seem to be the heaviest or the most frequent. Then, once you compile them, see which ones matter and which ones don’t.
To illustrate this point, start with your grocery list. Look carefully at the different items you plan to buy or have bought for that week. What would you consider must-have foods? Perhaps you’re thinking of eggs, bread, broccoli, and chicken breast. Those sound healthy and filling, right?
Now, can you say the same for your snacks? If you think about it, chocolates and candies might be a good treat. However, they don’t need to be on your weekly list. By removing or reducing them, you can cut down your grocery bill by a few dollars. Soon, your weekly supermarket bill can leave over a good chunk of change for you to use. So, if you don’t know how to stick to a budget, start by revising the ones you already have.
Have you ever browsed a store, online or in person, and found something you “had to have”? If so, have you ever regretted those purchases? In that case, you might be an impulsive spender. What you might not know is that it’s more common than you think; according to PRNewswire, studies have shown that three out of four Americans felt their purchases were mostly spontaneous. In other words, they usually felt the urge to buy before they thought it over.
If you’re an impulsive spender, then learning how to stick to a budget will be difficult. The best way to fight your impulses is to stop and think. Before you even consider buying an item, take some time to reflect on it. Look at the pros and cons of what you want to buy. Take at least three days, if not more, to think about it. That way, you can overcome that rush of excitement and focus instead on what feels useful or necessary.
To make things easier, try keeping a small notebook or a set of sticky notes with you. Whether digital or on paper, you can write down what purchases you wanted to make. Don’t start spending until you’ve thought it all through. Once you review your notes, it’ll make more sense on which items deserve your attention. For instance, you might see a nice polo shirt on sale. It might look good, but do you need to add another shirt to your closet? Give your wardrobe a review first before you make that choice. It’s better to be safe with your cash than to be sorry about the costs.
Once you start to master your impulsive purchases, you can take it one step further with a no-spending challenge. It might sound drastic at first, but it’s actually a fun way to test your budgeting skills. Plus, it can help you see what habits are costing you money in the long run.
To do the no-spending challenge, list out all the essential expenses in your life. Outline them to cover a full month of your time. You can cover different costs like bills, groceries, and insurance. Afterward, make another list of the expenses you shouldn’t make for that month. Look carefully at your cravings and impulsive purchases. Make sure to consider what you usually enjoy, such as designer clothes, expensive coffee, and high-priced restaurant meals.
Once you begin, take time to reflect and review your financial plan. Track the differences between this challenge’s budget and your usual budget. By the end, you should discover just how much you’ve saved for that month alone. More importantly, completing the challenge can boost your savings quickly.
Sometimes, it’s hard to control your spending habits. Even when you know how to stick to a budget, you might struggle to keep your impulses in check. If you need help or guidance, then consider getting an accountability partner. Like a basketball coach or a gym trainer, these financial friends can keep an eye on your spending habits. They can be the ones to alert you when you’re spending too much or too often.
One way you can find an accountability partner is through online forums and social media. There are many people who are also trying to discover how to stick to a budget. They might be asking for someone outside their circle to be accountability partners. You can find them and together, work towards controlling those shopping sprees.
If you aren’t comfortable with strangers monitoring your money, then look for trusted friends or family. Make sure that they don’t carry the same spending habits as you do. That way, when you feel compelled to buy a latte or handbag, they’ll remind you of what’s at stake. With enough time, you’ll learn how to stick to a budget and gain some self-control over your financial plans.
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