If you are part of the 54 percent of Americans who are making financial resolutions in 2014, you are in good company. We start off with good intentions but before we know it, it’s April Fool’s Day, you just blew $20 on saran wrap for “the most epic prank ever” and your goals are long forgotten. Not this year, my people. We here at Bargain Babe are by your side with:
5 steps to sticking to a budget
Step 1: Set specific goals
By setting specific markers to strive for instead of blanket statements, goals seem more achievable and you are likelier to stay motivated. For example, turn “I want to save money” into “I will put $100 a month into savings.” Instead of, “I want to go to Mexico this summer,” say “I will set aside $25 a week for the next 20 weeks to buy a plane ticket.”
Step 2: Track expenses
For one month, write down every. single. cent. you spend. I like to snap pictures of receipts with my phone, and enter them into an Excel spreadsheet once a week. It’s easy to organize and Excel is way better at math than I am. Sit down at the end of the month and see where your money is going. You’d be surprised how quickly budget busters like lunch, coffee and happy hour add up. Once the big picture is in front of you, it’s easier to make choices on what has to stay, where you can cut back and what needs to go so you can achieve your goals. Some banks and credit cards split up your spending into categories for you, or you can use a free online service like Mint.
Step 3: Make a plan
Now it’s time to set your spending. Again, Excel or an online budget app is a great tool because they are easily accessible and adjustable. Plug in your money coming in and line out all of your bills. If one of your goals is to set aside $25 a week, put that in as a “bill”, so you are sure to make it a priority. Leave room for a hobby or treat, too, to lessen the temptation to splurge. When estimating expenses, always guess high so you are more likely to underspend than overspend.
Step 4: Do a progress report
Every two weeks, sit down with your budget and see how it’s going. If you find that you are overspending on lunch with coworkers and don’t want to miss out on that time, choose another area to cut, like monthly manicures. It’s okay to make adjustments within your budget, just make sure you aren’t tweaking the numbers so you can overspend. You’re only cheating yourself!
Step 5: Reevaluate your objectives
You’ve been watching your budget for a few weeks or months now, so use what you are learning to make adjustments or additions to your goals. If you find yourself with an extra $50 each week, decide immediately where that money will go so you aren’t tempted to be frivolous. On the other hand, if you are struggling to meet the budget, you may need to adjust goals so they are more realistic.
Stick to these easy budget tips, and you will not be the fool this April. Just make sure you check the toilet seat before you sit down.