Hefty expenses occur all of the time. Maybe you need a new car, a bigger house, or you have decided to go back and earn your degree. What do you do in these situations? Most individuals simply borrow the money, but is the right choice for you?
If you have created a budget using personal finance software, you know how much money you have coming in and how much of it is going out. You can see what is left over and how much you can put toward a new expense.
If you don’t have a budget, however, you may not realize what you are spending each month and may be tempted to enter into a loan for the money you need, rather than making the most of your income and budgeting for it.
In the long run, creating a budget and sticking to it is the best way to gain control over your finances and pay for those big expenses that may occur down the road. Sticking to your budget can be a frustrating task, but once you understand how a budget can improve your financial life, you will understand how important keeping with that budget can be.
If you are struggling with sticking to your budget, we have a few tips that can help you, so you don’t have to worry about financial problems anymore.
How to Stick to Your Budget
- Focus on Savings- Make saving money a priority in your household. When you create your budget using personal finance software, determine how much money you can save each month and then set that amount aside from every paycheque. If it helps, have that amount directly deposited into a savings account or mutual fund. If you don’t see it on your cheque, you are less likely to miss it.
- Use Cash- It’s easy to swipe a debit or credit card and walk out of a store with your purchase. You can’t really see the money or see what you are spending this way. If you want to stick to your budget however, you must be conscious of every purchase. You can do this by using cash. Take a certain amount of cash out of your account each week to spend on gas, food, and those extra expenses you might not really need. When you actually see the money leaving your hand, you will be less likely to spend all of it at once.
- Cut out the Bad Habits- While you may enjoy drinking and smoking, alcohol and cigarettes are expensive habits to have. Cut them out of your life and use that money toward other expenses. Don’t forget to put some of it toward your savings as well.
- Share Your Budgeting Responsibilities- If you are married, have a roommate, or have a family, the monthly budget shouldn’t sit solely on your shoulders. If you are the only one concerned about the household spending habits, you will be less likely to stick to the budget when you see your family spending their money haphazardly. Sit down and work out the budget together with personal finance software. If your entire household shares the budgeting responsibility, it can make a big difference.