Ask the Expert: How Do I Stick to a Budget?

Dear Ask the Expert, How Do I Stick to a Budget?

Sticking to a budget requires discipline and consistency. Here are some practical tips to help you stay on track:

• Define your “Why.”  Know why you want to budget and the financial goals you want to achieve
• Set realistic goals. For example, promising not to eat out for an entire year might be unrealistic. Instead, consider reducing outings from once a week to once a month. The money you save from staying in can be allocated to savings or some other budget item
• Set up automatic bill payments and savings directly from your pay.  This safeguards against temptations to use money allocated for savings to buy a new outfit you do not need.
• Break your spending down in weeks. This can help to spread expenses over your pay period.  For example, if you allocate $400 a month for groceries, and you shop weekly, consider it as $100 a week
• Track expenses regularly and look for areas where there is overspending. You might be surprised how much you’re spending on non-essential items. Ways to track expenses range from writing down every dollar spent in a notebook to using spreadsheets or budgeting apps that track spending and income automatically
• Revise your budget as circumstances change.  For example, new expenses come up if you start a family or old expenses fall away as you pay off debt
• Do not be embarrassed to say no.  If you can’t make an evening at the bar with friends because there is no room in the budget, politely decline the invitation

Finally, do not think of a budget as a restriction only.  It is taking control of your money to reach your goals.

Lydia R. McCollin, FCCA, FCA, is the Managing Director of LRM Consulting Services Inc.

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