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A budget is crucial in any successful financial plan. Among other things, you need it to properly make ends meet, save money, avoid debt, pay off your debts, and prepare for financial emergencies. Indeed, whether you have a five-figure income or earn millions per month, you need a budgeting plan to help you manage your money.
However, as several people have realized, it’s difficult to create and stick to a budget. It requires a lot of planning, discipline, and control. You need to think about groceries, savings, school fees, and bills payment. Philippines-based consumers may also not be too familiar with the available resources they can use to manage their finances effectively.
If you’re struggling with planning and sticking to your budget, here are some tips to help you:
Set Goals
The difficult process of budgeting is easier when you have a set goal in mind. Some examples include saving for retirement, building an emergency fund, and setting aside money for future vacations and special occasions.
When you’re tempted to overspend, remind yourself of your goal. You can write it down on a piece of paper and place it somewhere visible in your wallet. This way, your spending decisions have more weight because you’re always considering your financial objective.
Know Your Priorities
With a set goal in mind, you now have a guide on how to prioritize the rest of your expenses. As a general rule, set aside money first for your savings, emergency fund, insurance, and other long-term goals you have planned. Afterward, consider the Four Walls: food, shelter and utilities, basic clothing, and transportation. These are the basic necessities you need to properly function every day.
Once you’ve set aside a budget for these, you can now start planning for other expenses. Some examples include school fees, car maintenance, and entertainment. List them down on a sheet of paper, and then write beside each item a corresponding number depending on how much you prioritize them.
Using the example beforehand, you can write “1” beside school fees, for example. Meanwhile, entertainment—such as going to the movies or buying a new game—can be of lower priority and set aside for another time.
Find Accountability
As mentioned earlier, it takes a lot of discipline and self-control to stick to a budget. More often than not, you might be tempted to give yourself leeway in purchasing items such as during sales. Thus, it’s important to find other people who will remind you to keep in line.
Plan your budget along with your spouse or family and be open about your expenses. If you’re single, find an accountability partner to help you manage your finances. After all, it’s easier to adjust behavior when you know someone is looking after you.
Track Your Progress
The importance of monitoring your expenses cannot be stressed enough. It’s crucial that you always list down your purchases, bills, and other expenses to keep track of how much money you’ve already spent. Not only does this help you know your remaining balance, but it also helps you realize your unnecessary purchases. Consequently, you can adjust your spending habits to help you stick to the budget.
Take Advantage of Different Budgeting Resources
There are many ways to track your progress, including listing your expenses down in a notebook. However, technology today affords you several resources to manage your finances more effectively. These include:
- Digital payments. While cash helps limit how much you spend, paying online always leaves a paper trail for easier tracking. Some examples of cashless payment methods include online banking and payment cards, among others.
- Budgeting apps. Check your phone’s app store for money trackers than you can download. Simply input your incomes and expenses to help you track your spending.
- Auto payments. To help you remember payment due dates, set up an auto payment system in your savings account. This means that a set amount of money will be transferred to your billers on a scheduled day each month. This way, you won’t be tempted to spend your money as soon as it comes in.
These are only some of the resources you can use to help you stick to your budget. There are also several websites, apps, seminars, workshops, and other resources you can search online if you need more help. Make sure to do your due research to maximize these resources.
Get in the Right Mindset
Practicing the right values is crucial for reaching your financial goals. Aside from discipline and self-control, one of the most important is contentment. It’ll be difficult to stand by your budget when you’re comparing what you have with other people. Instead, find joy in what you can afford and learn to love what you do have. This can be time, family, skills, and even your friends.
At the end of the day, the most important thing to keep in mind is that a budget is there to help you, not limit you. It’s about spending your money intentionally and knowing where it goes. When you have a budget, you can spend your money without any guilt and achieve your financial goals on time.
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