How to Save with a budget
Budget and saving are a very popular topics to write about. An entire industry is built around budget and saving . Learning to save is very important to us, and we will continue to share more tips on saving.
In this post, we share a few tips on how to save and stick to a budget every month. This is easier said than done. For a lot of people, their next paycheck is already spent before it gets into their bank accounts. Monthly bills, meals, expensive gadgets, and other things that we get so accustomed to buying take a piece of the pie until we are left with nothing left saved. However the good news is that you will learn to stick to a budget and save money for the rainy day by following these steps.
Prepare yourself mentally to live on a budget
The biggest part of sticking to a budget is the mental preparation. To stick to a budget month to month you will need to have a lot of self control. You have to say “no” to spending money on anything that’s not included on the budget. This exercise is very difficult at first but it gets easier with practice. Before deciding to stick to a budget and doing it, you need to think about what it means to live on a budget. Convince yourself that sticking on a budget is for the greater good.
This point is listed first in order to stress the importance of mental preparedness. Sometimes we rush into a decision only to discover that the decision was not right. Sticking to a budget is in many ways similar to any other decision that we make. If you don’t prepare yourself mentally before embarking on the budget journey, you’ll easily spend money on other things that is not on the budget and you will not be able to save as you had originally intended.
Plan wisely to live on a budget
Planning is very important when deciding to stick to a budget. To help you do this, open up an excel spreadsheet and create a budget that you’ll follow religiously. Remember to only spend money on the bare necessities and even when you spend try to find the best online deals. On the top of the budget, put the amount you make every month. Then add lines for all the bills each month. Put things in there like car payment, budget for groceries, debt management. Only put important things and necessities. Then allow a small amount for extras like going out and enjoyment. This step is optional. If your money inflow is not large enough then you may not have enough room for extras. Get a mentor, friend, classmate, significant other, to keep you accountable. This needs to be someone you can trust to keep checking on you about your goals.
Make changes required to live on a budget
This step is actually two steps in one. First you need to analyze your current spending behavior honestly. Be critical and look for things that you can cut off, or you can reduce the amount you spend on it. For example if you drive a Tesla, then maybe it’s ok to drive a Hyundai instead.
Another example is if you eat out 5 times a week, then maybe you can reduce that to once or twice a week. If you have both a Netflix and Hulu Plus subscription, then maybe you need just Netflix, or maybe you need just Hulu Plus – it’s hard to say which is better these days. I am sure you can see the pattern here. You analyze your current spending behaviors and see how you can minimize it. The second part of this stage is actually making the changes you have identified. This is the difficult part but you can start small, which leads us to the next point.
Run a small test to live on a budget
After deciding to live on a budget, you need to run a small test to see that it is something you can do. Pick a small target, like a week or a month, and then try to follow a budget for that period. The advantage of this is that it puts less pressure on you. Doing something drastically different for a week or a month is more realistic than deciding to do it for 5 years. If you can do it for a month, then try doing it for another month and then another month. If you achieve your 6 month goal, then try a year goal, then 5 years. Build your way up and in no time you’ll be so good at it.
Make more changes to live on a budget
As you make the changes required to follow a strict budget, you’ll quickly find out that some things need to change even after your initial plan. Be spontaneous and open to this kind of change. Always come back and reassess your initial plan to see how you can improve it. There are life changes like marriage, or having a child, that will require you to revisit your initial plan and make more changes.
Don’t get discouraged as you live on a budget
Do not be discouraged. If you fall then pick yourself back up and keep running. Sticking to a budget is no easy task. It’s daunting and requires a lot of discipline and self control. Stick to the plan. Pay great attention to the little things and find more opportunities to cut on things.
Check out our other post on “Benefits of Couponing”.