While financial experts are quick to recommend budgeting, most gurus won’t admit that sticking to a budget can be extremely difficult.
It’s not hard to see why budgeting is tough. If you’ve tried and failed before, you could cite several reasons like: budgeting is boring, takes too much time, or doesn’t keep you from overspending.
But debt and budgeting are tied closely together, and, just as a lack of a budget can lead to debt, neglecting to create a budget to pay off debt makes the task much harder.
Even if you’ve hated budgets in the past, I’d recommend giving budgeting another shot. Here’s how you can change up your plan when you’ve failed at budgeting in the past.
Let go of perfection
Trying to be perfect with your budget is a tall order, especially when you’re just starting out or restarting after past failure. It’s easy for one problem to derail the entire plan.
Instead, don’t let the pursuit of perfection stop you from carrying on. If you forget to record a few purchases here and there, just let it go. If you exceed your budget for grocery shopping, just realize that you need to reset your goals for the net month. Your budget may cause you stress at times, but you need to look past this and keep pushing forward.
Commit to a trial period
Budgets can be overwhelming, and many people who fail do so because they take on too much too soon. If you’re left wondering how you’re going to keep up with your budget for a year, a decade, or the rest of your life, don’t. Instead, just take things one step at a time.
Start with a goal of sticking with your budget for a month. After that, you can step back and reevaluate where you’re at. Almost any task gets easier with time, so give budgeting a fair shot before you declare it’s too hard. But hopefully you’ll find it’s worthwhile and saves money, and you’ll be willing to keep going.
Much of what keeps people from sticking with budgets is the boredom of the task. There are few things that I can think of that are less fun than sitting down and typing out purchases from a stack of receipts into a spreadsheet. I can’t say I get any joy out of spending the time once a month evaluating past and future spending in dozens of categories, either.
Just realize that you don’t have to do these or other monotonous tasks to create a budget you can use and maintain. If you hate spreadsheets, sign up for free options that help you track your spending and keep a budget.
Mint.com makes both of these tasks really easy by minimizing the time you need to spend managing your system. Provide Mint with your credit card information, and it will pull all your spending data and categorize purchases automatically. For cash spending, you can use the Mint mobile app to log transactions on the go.
Also with Mint, you can create your budgets by simply sliding a bar to move dollar amounts up or down. Mint will even make suggestions about where to start with your budgets based on your spending history.
Keep it simple
If you prefer to use a spreadsheet or written budget, start out with something simple. You don’t need to have tons of categories for everything you spend on. Making the budget complicated just increases the chances for failure.
Instead, lump together items for easier tracking. For example, spending on dining out, fast food, and bars could all be grouped into one category. You could also group any needs around the house, from toilet paper to toothpaste. Here’s a simple budget template that let’s you choose from many categories, allowing you to simply ignore any options you don’t wish to use.
If you want to make it even easier, you could just create categories for “Wants” and “Needs.” This super-simple idea makes the whole process easy for even the most anti-budget individuals. Take a look at this budget template that breaks your spending down in a similar and uncomplicated way.
Just because you’re setting up a budget doesn’t mean you can cut spending in half overnight. While creating a spending plan is a positive change, adjusting spending habits will likely take some time.
To set your budget, work off what you’ve actually or what you think you’ve spent in the past. At worst, your numbers will be off, and you’ll need to adjust them for next month. This can be an eye-opening experience if you find you actually spend much than you realized before.
Find or create motivation
To keep your budget going, you’re going to need motivation for staying on track. Otherwise, overspending might just be an “Oops!” moment at the end of the month before you carry on with your life.
If you stay under budget, celebrate a little, and maybe treat yourself to dinner with some of the money you saved.
Aside from rewards, motivate yourself by envisioning your life after you’ve met both your short and long-term goals. Set up notes as reminders or use photos to keep goals fresh in your mind. Do you dream of a day when credit card payments are gone? Use that to convince yourself that it’s important to stay on budget.