Tips on how to stick to a set budget
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Pack a brown bag lunch
The single best way to save money is to pack and plan out your lunches on a weekly basis. Try keeping track and total up your spending for a week, you’ll soon realize that those lunches out are costing you huge. To illustrate, if you eat lunches out 5 days a week, you could be spending hundreds on these meals when you could easily plan and bring food from home. The same also applies to your morning coffee, a product that made at home literally costs pennies while those morning coffee trips could be costing you as much as $5-$10 a day which is upwards of $2,600 a year. Still think you can’t afford that trip abroad?
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Keep your receipts and review your actual expenses every month
Studies have proven that when we’re held accountable for our purchases we’re less likely to spend frivolously. Tracking your expenses doesn’t have to be overcomplicated as there are plenty of smartphone apps out there that can assist you for this. The main idea is to actually use them every time you make a purchase. Once you do this it can be eye opening to total up in a month just how much you may be spending on entertainment, food out, taxi rides, clothing, etc. This is important because you can’t change your spending habits if you don’t identify them in the first place. The first thing you’ll probably notice is that your actual spending is higher then what you’ve budgeted for. If this happens to you frequently, try to be realistic and adjust your budgeting goal by trying to meet in the middle. For example, if you budget $200 for entertainment but consistently spend double that, then try raising your budgeted amount to $300 and also try to reduce your spending a little in the next month. This should make your goal more attainable and therefore more likely that you’ll stick to your plan.
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Take out cash for grocery shopping and plan your meals
A lot of industry budgeting gurus will tell you that if you’re on a tight budget, take out cash for your weekly grocery shop. If you take your grocery budget amount out in cash once a week, you’ll physically see exactly how much you have to spend for the week and if you stick to cash, will prevent you from spending over budget. This strategy doesn’t just apply to those on a tight budget, if you’re looking to “stick” to your budget this can be a valuable tool for you as well no matter the budget size. Another great way to ensure you’re not wasting money in the supermarket by buying unneeded items is by planning your meals and creating a shopping list before you head to the store and avoiding buying items that aren’t on your list.
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Pay yourself first
When it comes to saving money, many people make the classic mistake of saving whatever is leftover at the end of the month, which can often be nothing. It’s critically important to pay yourself first. You can do this easily by setting up an automatic transfer into a savings account, and then budgeting with what’s left over. This ensures that you’re building and saving for goals as much as possible without forgoing it to the rest of your budgeted items.
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There’s a reason it’s called spending “habits”
Spending habits don’t develop overnight, which means they also won’t change that quickly either. If you truly are looking to change your spending habits and cut down expenses to save for that big purchase such as a house down payment, education, trip abroad, etc. it will take a bit of time and effort. 66 days on average to be exact according to a recent study conducted out of University College London. This means that if you’re looking to change or modify your spending habits, it’ll take at least two months before these new habits become automatic. The trick here is to acknowledge that these habits will take a period of at least two months to stick and really start to work for you, therefore make sure to make an honest effort in implementing some of these strategies it will pay off for you in the long term!
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If you come under budget, save it!
If you take anything away from this article try to remember this, if you happen to come in under budget for the month don’t spend it, save it! There is no written rule anywhere that dictates that you must spend your whole budget. Throw it in your savings account, or use it to pay off lump sum debt and you’ll be that much closer to your goal. The same goes for any additional windfalls in income that you receive such as an income tax return, bonus at work, etc. you’ll thank yourself in the future for it!
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