The road to financial hell is paved with good budget intentions. One of my readers, Gabriela from Houston, and her friends inspired me to write the Budget Life series. When talking to her about money, she informed me that not only is it hard to create a budget if no one has ever taught you, but it is hard to stick to a budget.
Earlier this week, I reviewed No Excuses! The Power of Self-Discipline by Brian Tracy and we are going to apply some of those self-discipline principles to help you get back on track with your budget and stay on track. Welcome to the Budget Discipline Academy!
Start Getting Back On Track With Budget Discipline
First you need to recognize that you are off track. The way to do this is to track your budget. Tracking your budget is different from realizing that you have run out of money a few days before payday. Tracking your budget means that you first set a budget and then you compare your income and expenses to your budget on a daily or weekly basis to ensure you are sticking to your budget.
10 Ways to Get Back On Track With Budget Discipline
- Review Your Goals – When you started your budget, you did so with a goal in mind. What was it? Most likely, you wanted to save money for something. Keep that goal in mind. In fact, keep it front and center. Start everyday with reciting or writing your goals. Practice this budget discipline and it will be easier to stay on track with you budget so you can achieve your goals.
- Track Your Budget Daily – Track you budget daily and you will never stray too far because once you notice you are off track, you can make small adjustments to get back on track. Use a service like Mint.com that lets you download your transaction daily so you can keep track of your spending.
- Use Budget Categories – When setting up your budget, use categories and place all of your spending into a category. For example, the most dangerous area I stray from my budget discipline is eating out. I broke my eating out into two different categories – restaurants and fast food. When I dine out with my family at night and on the weekends, I classify those expenses as restaurants. I classify eating out at lunch by myself or with co-workers as fast food. I track my expenses daily and when I reach my max budget in one of those categories, I stop eating out for the month in that category.
- Plan a Cash Flow Statement – An alternative to categories is to use a cash flow statement. My wife does this with our bills and our checking account. For the older folks who have been taught how to balance a checkbook, think of this as writing your checkbook out in advance. For my younger readers who do not know what a check is, think of this as taking a spreadsheet and writing down all of your income and expenses the month in advance. By planning your spending this way, you are very conscience of every purchase you make during the month. If you overspend on a purchase (like a night out), then you can compensate later in another area.
- Build an Emergency Fund – One of the biggest reasons for budget busting is unexpected expenses. Laura wrote at the beginning of the month about children needing emergency funds. Well, so do adults. To build an emergency fund, start with $1,000. Budget to save $1,000 and when you dip into the fund, make sure you make it a budget priority to replenish those funds. Having an emergency fund will help you stay on budget when life happens. WARNING – Emergency funds are for emergencies, not extra money to take a date out.
- Sell Something – When you don’t have an emergency fund, and an unexpected expense comes up you need to make a sacrifice and sell something. Look around your place. The more emotionally painful it is to come up with the money, the less likely it is that you will have to face this situation again. Take a look at that tablet, game console, furniture and even those new shoes. Get on craigslist or Ebay and make the sacrifice.
- Cut Expenses – Once you get into your budget discipline, you may realize that you are regularly spending more money than you make. If this is the case, you need to cut your expenses. There are many ways to cut your expenses and you will need to figure out what is best for you. Some common ways that I have used in the past is to drop a monthly subscription to something, turn off your cable or satellite, limit eating out and start cooking more, take in a roommate, and carpool. My wife and I are going to be moving closer to our work soon and our housing expenses are going to increase significantly. We need to modify our budget. We have cut our dining out down to one time a week. We are going to turn off the Satellite package and buy a ChromeCast device. We have canceled our gym membership and I started mowing the grass myself. The combination of the items above combined with the savings in gas will make up our budget difference.
- Start Small – When you are not spending more than you make but you are not saving what you want, starting small may be the way to go. For example, you make $2,000 a month and want to save $300 a month. However, you expenses are $1,900 a month. You still have $100 a month to save, but that is not your budgeted amount. If this is the case, start small. Work on building up to the $300 a month in savings over a six month period instead of expecting to do it all in one month. Set small goals, maybe an extra $40 a month, and that will be easier to achieve than an extra $200 a month. These small wins will help you build confidence and excitement to keep you moving forward.
- Earn More – If you have a professional job or are older, this can be one of the harder ways to attack your budget discipline. Sometimes, you are not willing to make the sacrifices to cut expenses. In that case, you need to look at the other side of the equation which is your income. If your spouse does not work, maybe he or she gets a part-time job. Maybe you take on a second job. I see people at my office everyday go into the restroom at the end of the day and come out wearing a waitstaff uniform. I met one of my neighbors in the front of our subdivision because she was my cashier at Home Depot on Black Friday. I, personally, write this blog as a means to earn extra money. There is no shame in wanting to earn more money. Suck it up and go submit your application.
- Get a Budget Buddy – This is my favorite way to stay on track with your budget discipline. You may have been raised to not talk about money with others, but that is wrong. According to Rich Dad Poor Dad, one of the key differences of wealthy individuals is that they talk about their money. They don’t go around bragging about how much they make. They talk about what they want to buy or about their current investment opportunities. They discuss strategies and what professionals they use. Just today, I was talking to my neighbor, Bruce, about homeowners insurance. His kept going up and up and he switched companies. He now pays half of what I pay and his house is larger than mine. I got his agents name and you can bet I’m going to give her a call.
Nothing is more frustrating than setting a budget only to find you are not sticking to it. With little discipline and the tricks above, you can get your budget back on track. For more budget ideas, sign up for my email newsletter to get them delivered right to your inbox.
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