5 Simple Tips for Sticking to a Budget

In Budgeting Tips by Phil McGilvrayLeave a Comment

It doesn’t matter who you are or how much you make, if you want to succeed financially you need to spend less than you earn. This is why learning to budget is such an essential life tool. But like all things worth doing, setting up and living to a realistic budget can be a challenge.

In this blog, we look at 5 simple tips you can use to help you stick to your budget.

Plan Your Meals

One of the most common areas of over-expenditure is groceries. While there is no doubt that spending on food is an essential part of life, unless you have a plan for how you do your grocery shopping, it is likely you will spend significantly more than necessary.

The first and smartest step to reduce your weekly food bill is to have a meal plan. Decide what you are going to eat at the start of each week, make a list of the ingredients and quantities required and then shop specifically for each item. This one action plan will save you heaps.

Secondly, where possible, shop with cash! You will be dead sure not to go over if you only have a limited amount of cash available – the chocolate biscuits are far less likely to make their way into the shopping trolley- Dunn and Bradstreet statistics have shown that people spend on average 18% more when paying with a credit card than when paying with cash.

Finally, it can be really difficult to curb impulse food spending when you are tired or hungry, so try shopping after and a meal and preferably earlier in the day. Shopping for groceries on the way home from work will not only cost you a whole lot more but you can be absolutely certain it won’t do your diet much good either.

Budget for Fun

If you truly want to succeed, financially budgeting needs to be a lifelong habit not just a fad. To ensure your budget is sustainable for the long term, you need to purposely build in some fun.

Where possible, you should allocate an amount every month for things like entertainment, holidays and eating out. Once this money has been allocated you can spend this money guilt free.

Build yourself a rewards system, you may need to cut down on the daily coffees and bought lunches but don’t cut it out altogether. Set yourself a goal to pack your lunches Monday to Thursday and then treat yourself on Fridays. It’s a lot easier to get through a week of sandwiches, leftovers, and instant coffee if you know you can splurge on Fridays.

Have a wish list of small thing you would like to do or buy and when you achieve specific milestones like two months of sticking to your budget or paying off your credit card or saving your first $1000. Once the milestone has been achieved, make sure you reward yourself by buying something on your wish list.

Small regular opportunities to enjoy your hard work are an essential part of a sustainable long term budget. The key is to ensure that you have a well-established structure for how and when you reward yourself.

Set Realistic Goals

We all have a reason for budgeting. Yours might be to pay off your debt, save for a holiday, or to build a cash reserve. Regardless what your goals are, it is really important that they are realistic and broken into easy to achieve bite-sized chunks.

If your goal is to pay off your lifestyle debts, make sure you focus on just one debt at a time. Start with the smallest debt, pay it off, and then tackle the next biggest debt. With each debt you pay off, your confidence and enjoyment of the process will grow.

The same applies to saving money. If you are saving to buy a house, having one big goal to save $100,000 can be a little scary and you will almost certainly doubt your ability to achieve such a big goal. However, if you break it into amounts of $5,000 or $10,000 and give yourself a time frame to achieve it, you will surprised how achievable the task becomes.

If you have set up your budget properly, you should know exactly how much you can afford to save each month. Knowing how much you can afford to save each month will allow you to quantify exactly how long it will take you to achieve each little goal on the way to you bigger goals.

The sense of achievement that comes from the successful completion of each goal provides a powerful incentive to continue with your budget even when you hit those inevitable obstacles along the way.


Track Your Daily Expenses

We regularly see people who spend hours recording their expenses in complicated spreadsheets and budgeting programs but still have no control over their money.

The key to a successful budget is ensuring you can quickly and easily enter your expenses daily or at worst every couple of days. There are two reason for this:

Firstly, the power of a good budget is in its ability to guide your spending decisions. You should be able to look at you budget and ascertain with one glance how much you can afford to spend on any particular expense today. The only way this will occur is if your expenses are up to date.

The second reason you need to track your expenses daily is because it is far easier to find 2-3 minutes every day to enter the day’s expenses into your budget than it is to find twenty minutes at the end of each week. The longer you leave entering your expenses the more likely you are to put your budget into the too hard basket!


Save for the Unexpected

One of the primary reasons most people fail at budgeting is they don’t build in a plan for unexpected expenses or emergencies. Whether it is an unforeseen medical procedure, helping out a friend or relative, repairing the roof on your house or your car blowing up, there is always going to be something that comes up that you could not have anticipated.

At Grandma’s Jars, step three in our Road Map for Financial Peace program is to build a rainy day fund of at least one months’ worth of income to cover the ‘just in case’ scenarios. Importantly, this step comes before step 4 – pay off your lifestyle debt. Followed by step 5, build a cash reserve equivalent to three months’ worth of expenses.

Having funds at the ready to cover unexpected expenses and emergencies will ensure your budget is not compromised when life throws you the inevitable curve ball.


Success will Come

We know that sticking to a budget isn’t always going to be easy but the reality is there is no magic pill when it comes to achieving your financial goals. Success comes from developing healthy habits and doing the little things right. Applying these 5 simple tips will go a long way towards helping you make your budget a natural part of everyday life.

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