5 Ways to Encourage and Sustain The Use of A Budget

If you ask any credit repair expert how best to manage your finances- the first thing you will hear is “make a budget and follow it religiously.” This is easier said than done for obvious reasons. It is always easier to steer away from rules and regulations than to follow them. Most people avoid even the word budget, let alone the actual act of setting a budget and following it.

It is not however, as hard as you may think it is. All you need to do is make up your mind that you want to stay clear of financial trouble and debt and follow a few simple steps:

1. Make a budget – Of course, the first step is to make a budget. Without actually creating the budget on paper, there is no use to even discuss any further steps. It is important to write out the budget in order to have a tangible visual reference of your financial goals. Do not act hastily when putting together a budget. Ensure that you include all your needs and still make provisions for savings, charity and entertainment. Utilize the help of professionals initially, if you are not sure you can draw up a proper budget. Once you make your budget, stick to it as if your life depended on it, because essentially it does. This should be one of the rules that are non-negotiable in your house.

2. Test-drive your budget for at least 3-6 months – This is going to be your lifestyle for the rest of your life. Do not be hasty in setting up a budget. If it is set unrealistically it will frustrate you and you will be forced sooner rather than later to dump it. If it is too liberal, you will not be able to instill financial discipline in your life – which is the most important function of a budget. So, be patient and keep adjusting your budget until you find the structure that suits your financial needs best.

3. Allow a once in a quarter splurge – Why are crash diets such terrible failures? It is because starvation brings on the unstoppable wish to binge and in the end you undo it all because you cannot resist food any more. Deprivation does not equal success. Similarly, if a budget focuses only on financial responsibilities; such as bills, and eliminates fun, you will end up thinking of nothing else but entertainment spending. The best way to manage this pitfall is to allow for a periodic splurge that will keep your mind at rest. This could be a bi-monthly outing or once in a quarter larger venture.

4. Involve every member of your family – The biggest threat to a family budget comes from non-cooperation from your family members. What is the use of you following the budget, if the rest of the family spends money with both hands? Before you launch the budget in your home, talk and convince each member of your family of the importance of having a budget and following it. Encourage each member to contribute and support the budget. Without everyone’s contribution your budget may never succeed.

5. Adjusting expenses instead of enhancing income – A healthy and sustainable budget is one that takes care of every need of the members of the house and still has a little spill over for a few wants. Learn to identify needs from wants and balance these two aspects in a way that no one feels deprived. If the budget falls short of the income – the answer is not cutting expenses but enhancing the income.

Following a budget is crucial to your financial independence and self-sufficiency. Are you ready to set up a budget for your home in order to live a more fruitful future?

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