Making a budget isn’t easy but if you haven’t mastered the art of budgeting, you could land in a financial mess. Many new budgeters enthusiastically create great budgets. Everything is planned to a T and it seems that they will never have financial problems ever again.
Alas! The budget flops in the very first month. They may continue to follow the budget for the second and third month as well. The result is always the same. Eventually, they give up budgeting altogether.
Have you also experienced the same while budgeting? Here are a few ways in which you can save yourself from a headache and budget better.
Did you cut out the fun?
It is likely that you eliminated all the fun from the budget altogether. Many new budgeters make this mistake. They believe that they have to cut out every latte, every lunch, every takeout and every shopping trip from their budget if they have to save money.
This plan often backfires. In the beginning, you will feel great about cutting these expenses. However, whenever such an expense becomes necessary, you start blaming yourself. It is also likely that you start craving for these expenses and eventually end up spending more than what you intended to.
The idea is to have fun even when on a budget. Don’t cut expenses completely. One latte on a Saturday morning won’t do you any harm. Don’t eliminate fun from your lifestyle altogether. Learn to have fun within a budget. If you would take 3 drinks on an average day, take 1 or 2.
Do you have a small sinking fund?
You may have balanced out all expenses in your budget with your income. It looks amazing on paper. The only problem here is that you forgot to create a sinking fund for small or emergency expenses. You may have to take a taxi or entertain a guest at home for which you need extra money.
If you don’t have a sinking fund in your budget for these small expenses, your budget will blow past its limits. This is quite a frustrating experience. You must understand that life isn’t predictable and expenses may arise out of anywhere, no matter how small. Create a sinking fund in the budget. Utilize money from here. If you don’t spend it, transfer it to your cash savings or savings bank account.
Do you count your expenses honestly?
On most occasions, budgets fail because they are unable to account for their income or expenses. Some of you may spend a day shopping and come back home to budget it all. This is not the right thing to do. Punch in the income or expenses right when they are made. This will help you in budgeting responsibly. You will not miss items in the budget. This will help you get a clearer picture of your finances too.
Try these simple tips to make a better budget and you will start feeling the difference instantly. The goal is not to restrict spending completely but to make adequate provisions for every expenditure, along with savings.