Sticking To A Personal Budget – Guest Post
Sticking to a personal budget is always tough. While it is an effective way to start saving for future purchases or unexpected expenses, it often means denying yourself things that you would otherwise buy without a second thought. For this reason, many people avoid budgeting for fear that the sacrifices involved in the long, painful process they imagine will not be worth the effort for a long time. However, it is possible to strike such a balance in your finances that you can save money for a rainy day while still having money to spend on sunny ones by considering a few viable budgeting strategies.
When planning a budget, it is critical that you establish a separate emergency fund. Life is always unpredictable, and even the most well-observed budget can hit a serious snag due to a relatively minor issue such as a suddenly dead appliance, auto maintenance or medical expenses. Always keep an emergency fund to help defray the cost of such inevitabilities, and contribute to it as often as possible.
One of the most important facets of establishing a personal budget is to leave some room for moderate discretionary spending. It is true that you will have to limit the amount of money you spend each month on non-essential items, but trying to eliminate them entirely when devising a personal budget is more often than not a path to failure.
A personal budget is something like a diet in that the best one is the one that is most likely to be followed consistently over a long period of time. While allowing yourself to eat the less healthy foods you love once in a while may not be the most efficient dieting strategy possible, it is one that many people are able to live with and will yield the most results over time. This concept is similar to that which governs an effective budgeting strategy, as inflexible plans are most likely to be broken entirely. Set aside a relatively small sum for discretionary spending each month to maximize the viability of your financial plan.
Another effective way to make budgeting much easier is to use personal checks for purchases. Checks also decrease the likelihood of impulse spending, which is the most prolific killer of budgets. When the only payment method you carry around is the checkbook, your spending will take a significant dive. Think about it, there are merchants, such as Starbucks that no longer accept checks, with the plastic ever available, you might decide for one of many reasons to splurge, and spend $4.00 or so on a cup of Joe. With only a check on hand, you would be saved from the temptation to just impulsively buy. Any purchase from a vendor that does not accept checks would have to be exceedingly pre-meditated and thought out, saving you from purchases you don’t need, and the oh so terrible buyer’s remorse.
In addition, unlike other payment methods, writing a check ensures that you only spend the money you planned to spend for the purpose which you planned to spend it for. A personal check provides a record of any financial transaction, and this record should be logged into a checkbook. Keeping an accurate checkbook is essential to budgeting, as it allows you to see the balance between your savings and expenses on a regular basis and consider the impact of each purchase accordingly.
A budget is a household-wide commitment. You may be totally committed to your personal budget, but the spending habits of a spouse or other family member could quickly undermine your efforts. Have an open discussion with every member of your household regarding your financial strategy, and make sure everyone has a clear understanding of what you are trying to accomplish and their role in your plan. Be sure to take their needs and goals into consideration when devising your budget to make life easier for everyone.
Establishing a personal budget is a sound financial decision. However, it is far from easy, and many people forego a budget for fear that the decisions involved will be too painful to make. With the right balance between saving and living, a personal budget becomes a much more attractive option. Finding a comprehensive budget strategy that works for your life is the only way to ensure that it succeeds long-term.
Cara Price is an aspiring entrepreneur whose inner nerd is personal finance. She loves reading and writing, and is hopelessly addicted to coffee.