As many of us know its one thing to have a budget and yet another to stick to your budget.
And if you fail to adhere to your plan as shown in your budget you will fail to meet your financial goals. It is as easy as that.
For example, if your plan was to buy a house in 15 years, that plan may not come to fruition. A budget is nothing unless it is followed and followed strictly.
Fortunately there are ways to help us adhere to our budgets.
But before we go there I would like to remind you of the various posts I have written on the budget. I would urge you to visit these first before you continue with this one.
For example, I have a post, on why you should prepare a budget. This post goes through all the amazing reasons you should prepare a budget.
There is another post on essential sinking fund categories for your budget. This another fantastic post on how you can save money for big projects you might have.
Another post I would like you to consider visiting is How To Drastically Cut Household Expenses and Family Budget.
And if you are planning for a vacation I have a post on how to save money for a vacation.
But today our focus is on how we can adhere to our personal budget or family budget. Let’s get going.
Tips To Help You Stick To Your Budget
Below are some of the amazing tips to help you stick to your budget all the time.
I am not saying that you should stick to your budget no matter what. The budget needs to be flexible to accommodate some unforeseen circumstances.
Here I am thinking of things like emergencies along the way that might force you to change course.
This is different from unnecessary unplanned expenses that usually divert us from the course we have taken.
So here we go on the tips.
1. Create Budget Category Owners
One of the coolest ways to make sure that you adhere to your budget is to have budget owners for each category in your budget.
What I mean is that for example, you could be responsible for vacation savings, and your spouse could be responsible for groceries.
And if you have children you could also give them responsibilities for other parts of the budget.
By engaging your children you will be preparing them for adulthood where they will be responsible for their own financial management.
Children learn by doing and by observing and if you combine the two you will raise responsible future citizens of this world.
By allocating budget responsibilities you will be able to hold each other to account. And everyone knows that accountability helps to ensure good stewardship of resources.
This is precisely the reason why managers are accountable to the directors and the directors to the shareholders. Without an accountability mechanism, there will be chaos and loss of resources.
This is not only in organizations and companies but also applies in government. In government for example you have the congress or parliament who hold the government to account.
Only in dictatorships is there no accountability by the excecutive.
2. Put a Reward Mechanism For Adherence to The Budget
One thing that I have observed and has been proven by studies is the fact that the human brain is wired to respond to rewards.
Most people will be motivated to do various things on the understanding that at the end of it all there will be a reward.
If there is no reward most people won’t be motivated to carry out a task. This is something that parents know so well.
If you have ever had children you will know the power of rewards.
Children can be picky sometimes when it comes to food and the best way to make them eat is to offer some rewards.
For example, you can have a daughter who hates eating vegetables as most children do.
The best way to make such a child eat will be to offer some reward e.g. some chocolate after she finishes.
To be honest, it does not always have to be a material reward as you can use praise and other ways to motivate her.
So when it comes to budgeting you can create such kind of rewards. If it is a family you can for example say whoever sticks to his or her budget category will be getting some cinema tickets.
In that way, each budget holder will make sure that they stick to their budget in the hope of getting the reward.
If you are alone you can also do the same to yourself. In that way, you will have your eyes set on the reward.
3. Only Use Cash When Shopping
No one disagrees with the fact that cards are the most convenient way of paying for things. At least when compared to cash.
They are actually cheaper to use that cash. And you can use cards on the phone or the internet something you cannot do with cash.
Unfortunately, it is this convenience that carries with it risks. The risk that you may end up spending more money than you intended.
This is because when you carry a card you are almost carrying all your bank account. And for credit cards, you are limited only by what your lending institution allows you to spend.
I have been to a shop and ended up buying something I never needed, all because I had a card with me.
It is for this reason that we encourage people to only carry cash sufficient to meet their budgeted expenses when shopping.
In that way you won’t be taken up by some things that are not on your budget.
If you try this tip I can guarantee you that you will never again go over your budget.
In fact, anytime you are going into the city never take your cards with you. Unfortunately, this is becoming more of a challenge now because of all these mobile payment apps.
But before the advent of these mobile payment apps, this technique used to work quite well for me.
4. Get Rid of Your Bank Cards
As indicated in the previous paragraphs, most of the problems that we face now are the result of banks increasing our options for making payments.
And one of these things that have revolutionized our spending is bank cards. And if this was not enough we have mobile payment apps that I have mentioned above too.
The banks and the lending institutions know that these opportunities will help them to make more money due to all these unplanned expenses.
Not long ago most of our spending was through cash. In order to buy anything, you had to withdraw cash from your bank account.
And because of security concerns very few people withdrew all their salaries. So we would end up with only the cash we need. As a result, it was difficult to overspend.
But now with bank cards, it is like we have our whole salary with us anywhere we go when we have a bank card.
And not just our salary as we have overdraft limits and credit limits in the case of credit cards. No wonder we live in a time when most people in the western world are heavily indebted.
This is why some financial experts advise people to cut their credit cards and just keep the details somewhere for use in emergencies or vacations.
In this way, you don’t have to be carrying around your cards, and with it the risk that you will overspend.
5. Prepare a List When Shopping
One of the major reasons for people failing to adhere to their budgets is the lack of a shopping list.
They go shopping without any list and end up buying things that are not on their budget.
If you want to avoid this you need to start planning ahead of any expenses that you make.
In my case, I make my grocery shopping weekly and therefore prepare my grocery list on Saturday evenings for shopping on Sundays.
I, therefore, plan way ahead about what I plan to buy for that week. As a result, I reduce the risk of buying unbudgeted for things.
The preparation can be made much easier if during your budget preparation you detailed everything.
If you did that then it will just be a question of going through that list and comparing it to your current stock of groceries.
Another tip on the grocery list is to organize your list according to sections. In that way, your shopping will be quick and easy.
6. Automate Your Recurrent Expenses and Savings
We all have all sorts of recurrent monthly expenses such as broadband internet subscriptions, phone subscriptions, water, and electricity bills. All such payments need to be automated.
In the case of these utility bills, one can opt to pay by direct debit.
This is where the company will collect the amount you owe them directly from your bank account without your intervention. The utility company can change the amount and the date they collect the amount
In that way you can avoid missing these critical and very important payments.
Besides expenses, one can also automate payments or transfers related to your savings accounts.
One way to do that is through the creation of standing orders. A standing order is a way of setting up a regular, fixed payment from your bank account.
In short you the customer are instructing the bank to make a specified payment or payments on a specified date or dates.
Therefore setting a standing order means you don’t have to manually transfer savings from your current account to your savings account.
It will all be done by the bank software without your intervention. Of course, you are free to stop or amend the instructions anytime you want.
7. Use an App To Track Your Budget
Besides manually trying to control your expenses and adhere to your budget one can also use apps to monitor his expenses versus his budget.
Such apps include, Mint and Pennies.
According to its website, Pennies is an app for managing your personal budgets and spending money on the go.
With Pennies, you can have as many budgets as you need and be able to track them how you want.
Pennies allows you to set daily targets.
One can also sync his or her budget and expenses across all his or her devices instantly.
You can also use any major currency symbols on your budgets.
Mint is probably much more versatile than Pennies as it put all your bank accounts, credit cards, bills, and investments in one place.
Mint uses the information it gleans from your bank account to help in your budgeting.
Since almost all our expenses go through our banks, Mint is really a very good tool when it comes to budget preparation.
One cannot create a good budget without analyzing past expenses and income. Therefore to have a tool that is able to analyze your bank transaction during this process is really cool
With Mint, you are thus able to track your budget, investments and even monitor your credit score too.
The coolest thing that I like about Mint is the ability to track your expenses in real-time.
As long as all your expenses go through the bank then the app will be able to show you in real-time whether you are adhering to the budget or not.
Because of this, you can be able to take action fast if you are off the tracks. Whereas if you were doing everything manually you will not be able to know that you are off in real-time
I hope that armed with these tips you will now be able to stick to your budget and therefore be able to meet all your financial goals.