Articles for Moms > 10 Tips to Make Sure Your Financial Budget Will Succeed

10 Tips to Make Sure Your Financial Budget Will Succeed

You‚ve analyzed your past expenses, put them into spreadsheets, loaded Quicken with all of your data and come up with a budget. Now what? The tough part! You actually have to stick to your budget and put your plans into action. This is easier said than done. In many cases you will have forgotten about your budget and your financial goals 6 months or a year down the road. How do you keep this from happening to you?

Here's how. Make sure you follow some of these tips below so this doesn‚t happen to you.

1. Create a budget with realistic targets ˆ Let‚s say one of your budget  goals is to not eat out for lunch or dinner on a regular basis. If you are  honest with yourself you may find this to be an unrealistic goal. Sometimes  it‚s a nice break to eat out and have a relaxing rewarding evening. In other  words, don‚t set the bar too high. Drastic and unrealistic goals are one of  the surefire ways your budget will not succeed.
2. Budget for expenses that don‚t occur on a routine basis ˆ Make sure  you give consideration to expenses that occur once a year, such as holiday  presents, birthdays, vacations, weddings, car maintenance costs, etc. These  expenses don‚t occur every month and they will bust your budget plans wide  open. Make a list of these events on a calendar and put a dollar figure to  them. Place them in the month they are expected to occur so you can plan in  advance how you will pay for them. The regular routine expenses are not the  reason your budget will fail. It is these "gotchas" that will wreck havoc on  your budget if you don‚t plan for them.
3. Put your budget in writing ˆ Take the time to write down your budget  plans. Making a mental note of your budget goals is a recipe for failure.  Don‚t assume that your financial future will take care of itself by making a  simple mental note to yourself. If you have your budget goals detailed in  writing you can review and remind yourself weekly and monthly of your  financial goals.
4. If you have a bad month or week, don‚t give up! ˆ Let‚s say you have  been reaching your budget goals for three months. In the fourth month, for  whatever reason, you didn‚t reach your budget goals. Maybe you even stopped  trying to stick to your budget! If this happens, don‚t just throw your hands  up in the air and admit to failure. Everyone falls off the wagon sometimes.  Your budget is a journey. There will be bumps in the road, so the key is to  realize that everyone makes mistakes. This relates to a story I like about a  great old time golfer named Walter Hagen. Before each round of golf, he told  himself that he would have 4 or 5 bad shots. During the golf round, if he hit  his ball into a bunker, he would tell himself, "There is one of my bad shots  that I was expecting", hit the ball out of the bunker and move on. It didn‚t  phase him one bit because he had knew there would be some bad shots in his  round.
5. Adjust your budget over time ˆ This one is a biggie! It can take  months or even years to fine tune a personal budget. When you initially made  your budget plans, you probably had to guess at some of your figures. They  might not have been in touch with the realities of every day life. For  example, you may have underestimated your monthly grocery or utility bills. If  this happens, analyze all of the underlying money that was spend in this  category to see if your initial estimate was unrealistic. If it was, try to  come up with a more accurate number and then to stick to that new figure. It  is this type of adjustment that is one of the keys to making sure you can  stick to your budget.
6. Review your budget every month ˆ This is where you will make any  adjustments that are needed. Set aside the first day of each new month to  review your income and expenditures and match them to your budget goals. By  actively reviewing your finances and comparing it to your budget, you can  adjust your spending habits. This gives you a chance to analyze areas that  exceeded your budget expectations and make the adjustments in your spending  habits or your budget. The goal here is to not forget about your budget. One  tip that has worked for me is to put a printout of my basic budget goals on  the refrigerator. That way every day, several times a day, I would notice my  budget goals sheet. I may not read it every time, but I notice it and it  reminds me that I need to stick to my budget. That is why tip number 3 is so  important.
7. Set specific short-term goals ˆ Let‚s say one of your budget goals is  to have all of your credit card bills paid off in two years. If your credit  card balances total $20,000 that would be $10,000 a year. Divide that number  further into quarterly reductions in your credit card bills, in this case  $2,500 every 3 months. Now, this is a more tangible budget goal to shoot for  isn‚t it? I find that when I divide intermediate and long term goals into  short-term tangible stepping stones, I am able to feel a greater sense of  accomplishment and am more likely to succeed. This brings us to number seven∑  
8. Reward yourself ˆ That‚s right! Treat yourself when you reach your  some of your short-term goals. Since your financial budget is really a  journey, take some time to smell the roses on your way. Sticking to your  budget should not be a restrictive, unpleasant experience. Not only should you  take the time to enjoy your financial accomplishments along the way, but use  part of your budget for fun things that you enjoy. Just make sure your rewards  don‚t end up breaking your budget!
9. Pay yourself first ˆ I‚m sure that one of your budget goals is to save  and invest a portion of your income. One of the keys to make sure you succeed  at this is to do what the IRS does with your paycheck, take it out of your  discretionary income immediately. This way, the money is saved away right off  the bat. Move the money immediately into a savings or mutual fund account.  Many mutual fund companies can setup automatic deductions from your paycheck.  Despite your best intentions to save, the hectic, daily demands of life can  reduce the amount you are able to save.
10. Attitude is everything ˆ When most people think of a budget, they  picture restrictions and pain. Almost like a diet. You know what happens with  most diets? They don‚t seem work for long! First, if your budget is too  strict, too restrictive on your spending, it won‚t work either. However, you  will need to limit your spending in some areas and this will take some  adjustment in your attitude. I found that when I am feeling limited and sorry  for myself when I can‚t purchase something that I want, I remember my  financial goals I set with my budget. I think about the satisfaction I feel  when I reach those goals. Over time, you find that you don‚t want to  disappoint yourself by breaking your spending goals on a spur of the moment  purchase. Now, I actually get more pleasure knowing that I am reaching my  budget goals when the thought of an impulse purchase crosses my mind.
    

If you follow these tips, your budget plans are more likely to be a great success. By taking some simple steps you will find that living within a budget is not as tough as you imagined. It can actually be fun and rewarding!

Greg Quincy

Greg Quincy is the publisher of the website www.financialtipsforyou.com , offering his insights and tips that he has gained from working in the financial industry and the economic challenges of raising a family.