It’s a wоrd wе all lоvе tо hatе, simply bесausе it impоsеs a rеstriсtiоn оn us. Yоu may еarn еnоugh tо mееt all оur rеquirеmеnts and lеad a соmfоrtablе lifе, yеt if yоu dоn’t impоsе a budgеt оn yоur еxpеnditurе, a hеalthy banк balanсе сan sо еasily bесоmе a runaway dеbt train. Sо nо mattеr hоw muсh mоnеy yоu maке, it’s wisе tо сrеatе a budgеt basеd оn yоur income and outflow. The problem with budgets is that most people are enthusiastic when it comes to creating them; when it comes to following them however, they find that they either throw caution to the winds and do as they please or that their budgets always fall short and they’re spending more than estimated. And so it happens month after month, with each new paycheck seeing new promises made but none kept – the only thing that happens with any surety is the increase in the mountain of debt. So if you want to make your budget work for you and prevent accumulating debt, here’s what you can do:
- Go under for income and over for expenses: When you’re calculating your total income, don’t add money that is not a sure thing. If you’re assured of a paycheck, add your take-home pay to the income column; if you’re assured of a dividend, add it to your income; but if you’re counting on an old aunt to die and the inheritance from her estate to come through or if you’re hoping a friend will return the money he borrowed, list them under “probable income” – if they are realized within the month, add it to next month’s income or push it into your savings account; if not, continue to list such items as probabilities.
When you’re listing expenditure, don’t set a tight limit with no flexibility whatsoever. Instead, give yourself room to go a little over what you think you will need to spend so that you don’t feel bad when you give in to little indulgences and impulse buys.
- Set aside some time to tally your expenses: If you want to make your budget work, you have to work at it. So set aside at least 15 minutes every day to tally your expenditure throughout the day; total all that you’ve spent in any form – cash, credit cards, direct debit from any of your accounts, debit card, store card, transportation card, etc. Subtract it from your budget total; only then will you be careful about the amount you spend the next day. If you don’t keep tabs on your budget, it’s easy to get carried away and spend much more than the amount you’ve allocated.
- Don’t obsess over trivialities: If you’ve gone over your budget by a few hundred dollars, find out where you’ve gone overboard before you start to berate yourself for not sticking to your budget. This way, you’re able to determine if the expense was essential and necessary, and if it wasn’t, you can ensure that you don’t repeat the same mistake the next month.
Remember, your budget is only as strong as your willpower – so strengthen the latter first before you set up the former.
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