Four Tips That Will Help You Stick To Your Budget
March 20, 2019
A personal budget is the first step toward financial independence. It will help you get on top of your money, eliminate debt, curve reckless spending, save up for a rainy day, and afford all that truly matters to you. For all the benefits that personal budgets can bring, it’s not always easy to stick to them, particularly over the long-term.
The purpose of a budget is to assign certain percentages of your income to all the categories that you spend your money. It’s relatively difficult to keep track of these expenditures, and without a budget, we almost always end up paying more in some areas, disregarding the others. It is why so many of us end up in crushing debt.
To help you out, here are some suggested percentages. Keep in mind that these are only a guide and you can set them in based on your income, needs, and preferences.
- Donations 10-15%
- Housing 25–35%
- Utilities 5–10%
- Food 10–15%
- Transportation 10–15%
- Health 5–10%
- Insurance 10–25%
- Personal 10-15%
- Recreation 5-10%
- Saving 10-15%
That said, here are several tips that will help you stick to your budget so that you can make the most with what you have.
1. Conscious Spending
Reckless spending is the death of any budget, no matter how well thought out it is. Conscious expenditures, on the other hand, works hand in hand with a personal budget. It is a technique by which you consciously analyze your spending habits so that you extract the most enjoyment from your purchases and utilize every dollar to its fullest.
Conscious spending is a way to gain clarity and awareness of your spending habits by observing the anticipated value of each item you buy. The perceived value is the personal and individual worth a person gives to every object.
So, by employing conscious spending, you will keep in line with your budget, and use your money to buy things that are valuable to you which bring you the most enjoyment. It is a having your cake and eating it too-type scenario.
2. Pay Yourself First
Pay yourself first is a popular term in personal finance and retirement planning which implies that you automatically set aside your savings contributions the moment you receive your paycheck. So, instead of having to route the money by hand every month, you will use apps that will do it on your behalf. This way, you will not have to keep track of what goes where since the software will do it automatically.
It’s surprising what people can achieve if they put their mind to it. By learning new skills, you will become more self-sufficient. It will also improve mood and helps people stick to their budget.
Learning to cook, for instance, will save you hundreds of dollars on restaurants and take-outs. Learning how to do fitness exercises at home, means that you won’t have to pay for that monthly membership anymore. You won’t have to buy a new shirt if you learn to sew. You can mend the garment if one or more of its buttons have fallen out. And the best part about all of this is that YouTube provides you with all the courses you need in the form of how-to videos.
4. Being Careful with Loans
From time to time, you might require a loan. And when it does happen, the best thing that you can do is to stay far away from payday loans or all sorts of predatory lenders with offers that are too good to be true. In keeping with your budget, these circumstances require you to work with a reputable lender with no hidden fees or exorbitant rates.
If you see yourself ever needing a short-term loan, Illinois Lending Corp is at your disposal. Apply online today or call us at 1.877.LOAN.195